Under Armour’s six-month search for its third-ever CEO ended last month with a surprise move. The Baltimore-based brand bypassed leaders in sports apparel and retail and instead tapped a veteran of the hospitality industry.
Stephanie Linnartz, who became Marriott International’s president in 2021 after 25 years with the lodging giant, will join the athletic apparel and footwear maker Feb. 27. She will lead a company that’s emerged from a multiyear reinvention and aims to rekindle interest with teens and young adults, win over more female consumers and make a substantial push into the fashion and lifestyle market.
Linnartz has not previously led retail or apparel brands, though she sits on the board of home improvement retailer Home Depot.
“Usually you expect for a retailer or a retail brand, someone within the industry to be appointed to that top position,” said Neil Saunders, managing director of research firm GlobalData. “So having someone that’s completely left field, comes in from outside and from a different industry, is quite unusual.”
Still, he and other analysts applauded the choice, citing Linnartz’ experience guiding a much larger, global brand, as well as her viewpoint as a female executive and know-how in the digital space that’s critical to Under Armour’s growth. After having completed a plan to become more efficient and competitive, and with internal expertise in place, Under Armour may need an outside perspective, analysts said.
“Under Armour has been in a slump for more than five years, and re-playing old playbooks is not likely going to lead to a significant change in trajectory,” said Mark Ryski, a retail analytics expert and CEO of HeadCount Corp., which analyzes retail traffic and conversion. “Recycling same-industry executives often results in the same approaches. This move says a lot about the courageousness of [brand founder] Kevin Plank and his board and their desire to evolve.”
Ryski said much of Linnartz’ experience in digital transformation, branding and consumer loyalty can apply to Under Armour.
“Yes, the context is different,” he said, “but this is about how she will approach these challenges.”
Plank, who will retain his role as brand chief and executive chairman, called Linnartz a “proven growth leader” with a track record of brand strategy, developing talent and boosting consumer loyalty.
Linnartz, who will take over from interim CEO Colin Browne, said in a social media post that leading Under Armour into its next chapter is a “dream opportunity.” She was unavailable for further comment.
Her new role comes amid a wave of leadership shake-ups in apparel retail, which is struggling with excess inventory, supply chain challenges, pressures on margins and profitability and changing trends as consumers spend less on discretionary goods. Many companies are rethinking their physical space and refocusing on e-commerce.
Besides Under Armour, Adidas, Calvin Klein, Puma, Stitch Fix, Designer Brands and Levi’s are bringing in new CEOs or presidents this year. Levi’s, too, touted a new leader’s digital accomplishments, with Michelle Gass stepping in as president after boosting digital business as CEO of Kohl’s.
At Under Armour, while Plank gave up the CEO role in 2019 as the company struggled to recover from stalled growth and accounting problems, the founder retains a large and controlling role as the largest shareholder.
Plank “reportedly views the CEO role as a partnership,” one that can be effective given the expertise each brings to the table, said Jim Duffy, a managing director of Stifel Financial Corp., a brokerage and investment banking firm.
And having Browne return to his previous role as chief operating officer will bring additional leadership depth, Duffy said in a report in which he reaffirmed a “buy” rating on Under Armour’s stock.
“We are pleased to see an outside candidate with complimentary skill set fill the role,” Duffy said. “Working in partnership with Mr. Plank and Mr. Browne, we view Ms. Linnartz a good match.”
It will be crucial for the top executives to work well together, said Karyl Leggio, professor of finance at Loyola University Maryland.
“Because Kevin Plank is going to continue to be involved, the synergies between Plank and the CEO become really important,” she said. “They’ve got to get along, and they have to have complementary skills. His skills are not necessarily in e-commerce and hers are. It’s an interesting move that has the potential to be really successful for Under Armour.”
Linnartz is credited with being the driving force behind the multibillion dollar digital transformation of Marriott’s reservations, property management and loyalty program to make it easier for guests to access booking, check-ins, room selection and other functions online. The hotel chain says it has grown its Marriott Bonvoy brand into the travel industry’s largest customer loyalty program with 173 million members.
A Marriott spokesperson said the effort goes well beyond replacing outdated technology.
“We are building a new foundation that will enable [the brand to] re-imagine how our customers, associates and owners experience Marriott,” said Melissa Froehlich Flood, the spokeswoman for Bethesda-based Marriott.
A leader with a knack for such transformation could benefit Under Armour as it competes with Lululemon and other digitally savvy brands, experts said.
“It’s very important to offer a great digital experience because lot of customers these days live digitally, especially younger consumers,” Saunders said. “They want to do a lot of things online, whether it be buy, research, record information, check up on the progress of orders. They want experiences that are simple to use and can integrate into their day-to-day lives.”
Analysts believe Linnartz’ experience steering a much larger global brand, with nearly 8,200 properties in 138 countries, also is a plus as Under Armour seeks to ramp up international sales, which account for about a third of its $5.6 billion in annual sales. Part of Linnartz’ job at Marriott has been overseeing development of the company’s 30 lodging brands on a global scale.
A female executive’s perspective also could influence branding and product positioning in what has been perceived as a masculine brand, in turn helping to woo female shoppers.
“They’ve been struggling with capturing the women’s market, certainly in footwear,” where brands such as Lululemon, Allbirds and On Cloud have made strides, Leggio said. “They need to figure out this women’s market, and they haven’t.”
The Evening Sun
Linnartz could be “a different voice at the table when they have those discussions,” she said.
Under Armour has been without a permanent CEO since June, when Patrik Frisk left after little more than two years at the helm after engineering a multiyear turnaround. The company did not give a reason for his departure, announcing it in May just two weeks after posting a quarterly loss and missing revenue projections. Under Amour’s stock price dropped a third in value that month.
Shares closed Friday at $11.49 each, well below their peak of more than $50 each in 2015.
Linnartz will take the reins at a challenging time, not only for Under Armour, but for the athletic apparel market as a whole.
Under Armour is “no longer a young startup,” Leggio said. “It’s a mature company in a very competitive industry. The challenge they have is, can they be a breakout now? Can they create an entrepreneurial environment and mindset that will allow them to come up with the next product? ... That will get them out of the mature stage and get them in the high-growth stage again.”
Additionally, analysts said, the company needs to improve sales at retail partners such as Dick’s Sporting Goods, come up with an appealing mix of leisure clothing that stays true to the brand, and do a better job of vying with the likes of Nike and Lululemon for young consumers.
“Product is at the heart and center of most brands like Under Armour,” Saunders said. “Under Armour can’t lose that point of view if they want to compete more successfully. ... It’s a very interesting and very critical time to change the leadership at the top.”