Under Armour brings in new president; Plank remains CEO

Under Armour is bringing in an outsider to become president of the Baltimore-based athletic brand as it strives to revive slowing sales and its deflated stock price.

Under Armour founder Kevin Plank will remain chairman and CEO but relinquish the title of president to Patrik Frisk, who has deep experience in footwear as CEO at the Aldo shoe retailer and as a top executive for the parent company of Timberland and The North Face.

Frisk, who will report to Plank after he starts July 10, is expected to bring a fresh perspective on brand building and management chops to Under Armour as it expands beyond its performance apparel roots, analysts said Tuesday.

"It relieves Kevin [Plank] from running the day-to-day operations as much as he was," and signals his willingness to decentralize some of the decision making, said Sam Poser, an analyst with SIG Susquehanna Financial Group LLP.

The restructuring reduces the number of executives reporting to Plank from 10 to six as Frisk assumes some of those responsibilities. Frisk will be responsible for the company's so-called go-to-market strategy for reaching customers and for executing its long-term growth plan.

"Patrik's global experience in brand building, including a proven and disciplined record of driving growth, while enhancing profitability and efficiency, will be instrumental as we work to transform our business model to deliver long-term value for our consumers, customers and shareholder," Plank said in the announcement.

Frisk's hiring marks the second time Under Armour has gone outside the company to hire a president. In 2008, the company brought in David McCreight, a former president of retailer Lands' End, to run its core businesses. McCreight resigned two years later.

Under Armour said the management changes announced Tuesday are part of its plans to reset after years of rapid growth, while focusing on becoming more efficient, boosting digital business and reaching consumers.

The company has struggled recently with shifting customer buying habits and a slowdown in sales in its core U.S. apparel business. In April, it announced its first quarterly loss since it became a public company in 2005.

And its stock price, which closed Tuesday up 21 cents, at $21.77 a share, is well below its value in recent years.

A native of Sweden, Frisk brings a strong track record with big brands to Under Armour, which has lost some of its upstart cool in recent years amid ongoing competition with industry behemoth Nike and a resurgent Adidas.

Before joining The Aldo Group in Montreal as CEO in 2014, he spent a decade at VF Corp., where he was coalition president of outdoor Americas with responsibility for The North Face, Timberland, JanSport, lucy and SmartWool brands. He was credited with revitalizing the Timberland brand after being appointed president when VF acquired it from its founder in 2011.

Before that, he held a number of other executive posts for VF and also worked in senior positions with Peak Performance and W.L. Gore & Associates. Before coming to the United States, he co-founded the retailer Lager 157, still based in the small Swedish village of Gallstad.

At Under Armour, Frisk, 54, will earn a base salary of $1 million, according to an Under Armour filing with the Securities and Exchange Commission.

"Under Armour has added a seasoned leader who was a rising star at VF Corp. prior to his term as CEO of Aldo Shoes," Jim Duffy, an analyst with Stifel, said in a report Tuesday.

Matt Powell, a sports industry analyst for The NPD Group, said Frisk can help the company as it expands beyond sports apparel, thanks to his time with The North Face, "the intersection of sports and fashion."

"It's a great add for them," Powell said. "He will bring them focus on the categories that are really critical to their long and short-term growth. There's already an initiative in place to get into the sportswear business, but that's easier said than done. ... He will bring them a point of view that will help this transition."

Under Armour has built its brand based on the performance of its footwear and clothing, still the core of the brand, Powell said, but "fashion is fickle, and we're in a period where sportswear is driving the marketplace."

Frisk, he said, "understands the fashion athletic footwear business. It has a different rhythm than the performance footwear business and his experience at Aldo getting product to market quickly ... should help them move more quickly in the fashion world."

Frisk left Aldo in March when he was replaced by the son of the firm's founder.

"We're very pleased for Patrik, he will do an incredible job at Under Armour," Aldo Group CEO David Bensadoun said in a statement. "He has the drive, tenacity and skill to add tremendous value to any business."

In an interview with the Swedish newspaper Boras Tidning in early March, Frisk foreshadowed what was about to happen.

"We have agreed that the son will take over the CEO in the spring," he told the paper, according to Google Translate. "I will take a board assignment at a major listed company in the United States. And I will also get into a new role in an interesting company."

In May, Frisk was appointed to the board of directors for Gildan, a Canadian activewear manufacturer listed on the New York Stock Exchange that makes and markets Under Armour socks in the United States.

Hiring Frisk to juggle Under Armour's day-to-day operation gives Plank the ability to focus on his broader vision for Under Armour, said Auburn Bell, an adjunct professor of marketing at Loyola University Maryland.

"It puts Kevin Plank is a place where he can step back and take a more macro view of the company and give guidance at a strategy level," said Bell, who thinks the move should be beneficial to the company and its shareholders.

Frisk's experience in footwear makes him an especially smart hire, Bell said.

"It's no secret that footwear is a huge opportunity," Bell said. "I think it makes all the sense in the world to hire someone with that expertise."

But Under Armour must act quickly to keep loyal customers and attract new ones as it competes with Nike and Adidas, Poser said. He and other analysts have expressed concern that moves to expand into channels such as Kohl's, Designer Shoe Warehouse and Famous Footwear could dilute the brand and fail to make up for sales lost because of retail chain bankruptcies and declining sales at key retailers such as Dicks Sporting Goods.

A number of Under Armour executives will repor to Frisk, including Charlie Maurath, chief revenue officer; Andy Donkin, chief marketing Officer; and Kevin Haley, president of strategy.

Other executives will continue to report to Plank, including Kip Fulks, co-founder and strategic adviser; Kerry Chandler, chief human resources officer; John Stanton, senior vice president, general counsel and corporate secretary; and David Bergman, the acting chief financial officer.

The company announced several other management changes Tuesday.

Paul Fipps, chief information officer and executive vice president of global operations, was named chief technology officer. He will oversee all aspects of engineering to support the brand's web and mobile applications and its information technology and real estate functions. Fipps will report to Plank and lead the Connected Fitness business, with Michael Lee, chief digital officer and head of Connected Fitness reporting to Fipps.

Colin Browne will become chief supply chain officer and be responsible for all global operations related to product sourcing and logistics. He joined Under Armour in 2016 as president of global sourcing. Browne will report to Frisk.

And Kevin Eskridge became chief product officer in May to oversee category management and product, merchandising, design and innovation functions. He has been with the company since 2009. Eskridge, the former senior vice president of global merchandising, helped establish the company's business in China. Eskridge also will report to Frisk.

"Today's leadership appointments and the streamlining of our organizational structure are transformative steps focused on a sharper, consumer-led approach and go-to-market strategy through our category management lens," Plank said in the announcement. "This underscores our work toward evolving from a great brand with good operations — to a great brand with great operations."

Sarah Gantz contributed to this report.

lmirabella@baltsun.com

Patrik Frisk

Title: Under Armour President and Chief Operating Officer

Age: 54

Base salary: $1 million

Previous position: CEO of The Aldo Group

Other past jobs: VF Corp., coalition president of outdoor Americas, president of Timberland brand, president of outdoor and action sports; The North Face, vice president and general manager; also worked for Peak Performance and W.L. Gore & Associates; and co-founded Lager 157, a Swedish retailer.

Birthplace: Sweden

Residence: Montreal

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