As the sports brand Kevin Plank founded struggles to regain its footing after a difficult year, the Under Armour CEO faced scrutiny Wednesday from shareholders who questioned his commitment to the company and the brand’s connection to consumers.
Plank and other top executives assured stockholders during the company’s annual meeting that they already are seeing results of steps the company began putting in place last year to reverse a slide in sales and stock price that started toward the end of 2016.
They highlighted reorganization plans designed to make the once-fast-growing $5 billion company more efficient, help it re-emerge as a leader in athletic footwear and apparel and deliver in-demand styles more quickly to consumers.
Plank sought to put to rest concerns that his personal investments in whiskey production, real estate development, horse racing and other ventures distracted him from Under Armour.
“My first priority is this business. My first priority is this brand and has always been this brand,” Plank said during the meeting at the company’s offices in Port Covington, where his real estate company amassed land and is working to develop a massive mixed-use project that would be anchored by an Under Armour corporate campus.
Plank said his projects outside the company tend to be “something that could tangentially help this company. That focus, that deliberateness has never changed. My time is driven completely on behalf of shareholders…
“The majority of my life is built in Under Armour, and it is the focus of everything that I do,” he said.
After years of rapid growth, Under Armour stumbled in 2017, as sales growth slowed amid store closings by key retailers, intense competition and changing demand for athletic apparel. The brand has been hurt by weak demand in the United States, its biggest market, and from competition from better-positioned rivals Nike and Adidas, which cut into Under Armour’s profit and growth.
Under Armour announced a restructuring plan in February expected to cost about $110 million to $130 million. Restructuring costs totaled $45 million in the first quarter, the company said.
One longtime shareholder at Wednesday’s meeting said he has seen the brand’s waning popularity in the buying habits of his college-age son, an athlete on a rowing team and also a shareholder. The father, from Northern Virginia, said when his son was in high school and shopping at the Under Armour store in McLean, Va., he wanted to buy “half the store,” but a couple of years ago, when in college, he returned to the store and couldn’t find anything he wanted.
“How are you actually trying to design and make things that your customers want?” the shareholder asked.
Patrik Frisk, Under Armour’s president who was brought in last July to help transform how the company takes its products from design to market, said the company is sharply cutting the variety of products it sells so that designers can spend more time making sure each product offers the best performance, style and fit.
And Plank promised changes in retail stores as well, with improved store displays better explaining products and how they perform.
Shareholder Ilene Gold of Pikesville told Plank she is looking for more style and fashion flexibility in her athletic wear.
“What I’m looking for is something that goes from work to go to yoga,” Gold said. “We look for styles, color, a different cut. I am looking for that shirt that I can wear that’s different.”
Plank noted that the brand has invested more in expanding its women’s assortment, which has grown into a $1 billion business, and just unveiled a new collection by principal ballet dancer and Under Armour endorser Misty Copeland. But he noted that the brand is working hard to attract women customers by stressing performance while improving style and versatility.
“She wants to look great,” Plank said. “She wants to look great whether she’s actually going to the gym or going to Starbucks or picking up the kids from school.”
In the women’s segment, he said, “we don't feel we’ve reached our true potential.”