Breaking into an existing market that is home to fierce, established brands isn’t a piece of cake. It may take a while, or many many years before that begins to happen. However, certain brands, with their unique product proposition, climb up the ladder only to become a major player. Under Armour is one such brand that broke in and how, and now eventually enjoys a healthy valuation of $4.8 billion by selling products in more than 60 countries around the world. To break into statistics and how the business grew to become what it is now, we spanned their journey to show you How Big is Under Armour and here is all the juice.
1. Under Armour for dummies
Under Armour, Inc. is an American sporting goods manufacturer which supplies athletic and casual apparel, as well as footwear. Its Global headquarters are located in Baltimore, Maryland and additionally has many offices worldwide in locations like Amsterdam (European headquarters), China, Indonesia and Canada.
Under Armour was founded in the year 1996 and despite being a much younger player as compared to other established athletic brands Reebok and Nike, it has garnered an impressive standing for itself in the last 20 years and is home to over fifteen thousand employees. Being number 3 in a recent top of 50 sporting goods brands by share of lifestyle consumer purchases in 2014 and ranking among the top five most valuable sports business brands worldwide in 2016 also show that the brand is doing quite well for itself.
Although Under Armour’s biggest market is in the US, it has had its biggest team deal with London soccer team Tottenham Hotspur.
2. Who is Kevin Plank?
Kevin A. Plank is a 45 years old American Entrepreneur and an alumnus of University of Maryland. He is the Founder, CEO and Chairman of Under Armour and the one who cultivated the business initially started in his grandmother’s basement in Washington, D.C to a global brand, and the rest is history as we know it. What is more interesting? Plank has a net worth of $2.5 Billion.
3. How it all started?
Most successful businesses have an interesting backstory to tell and UAA doesn’t disappoint in this case. It all started when Founder Kevin Plank, then a 23-year-old former University of Maryland special teams captain, brought an idea to life that he got on the football field. Back in the days while playing for his team at the University of Maryland, Plank was wary of changing out of the sweat-soaked T-shirts over and over again worn under his jersey. Knowing that there has to be a solution for this problem, he decided to do something about it when he noticed that his compression shorts remained dry.
Soon after graduation, Plank started his small venture in the basement of his grandmother’s house in Washington D.C and made a first prototype of the shirt which he gave to his Maryland teammates and friends who had gone on to play in the NFL. Thus, this was the beginning of a new industry that changed the way athletes dress forever. He soon mastered the T-shirt design built from microfibers and it was only before time that major competing brands including Nike, Adidas and Reebok followed suit.
More than half of UA’s consumer base, 53% precisely, consists of male and 47% female. They fall in the age bracket of 25-34 with a household income ranging from $75,000 to $149,000.
Its apparel segment forms the most successful product category representing a 67% share of total sales, while footwear and accessories sales account for 21 percent and 8 percent respectively.
5. Up & Up
Following a front page advertisement featuring Oakland Raiders quarterback Jeff George wearing an Under Armour mock turtleneck, more and more people began to take notice of the brand and that led Under Armour to its first major sale in the form of a request for 10 shirts by an equipment manager from Georgia Tech. This deal was a milestone for the brand as it brought more orders from other football teams. That same year, Under Armour launched several new apparel lines including ColdGear, TurfGear, AllseasonGear, and StreetGear. By the end of 1996, Under Armour had sold 500 Under Armour HeatGear shirts, generating $17,000 for the company. Under Armour, that was originally renamed from Heart and Body Armour, actually came to be called so when Plank’s brother asked him, “How’s that company you’re working on, uhh… Under Armor?” Plank, unsure whether or not his brother was messing with him quite liked it and hence the name. The company’s logo is also conspicuous and has become a permanent stay of many professional sporting events, right from football and boxing matches to snowboarding and gymnastics competitions.
6. So what makes Under Armour the rage it is?
We think Under Armour brought a strong USP to the table and that precisely was and is what puts it apart. Inspired by his problem, Plank went ahead and created a T-shirt using moisture-wicking synthetic fabric that kept athletes cool, dry, and light, the first of its kind. This highly innovative and super cool feature is a winner for us.
7. Then and Now – Products
The success of Under Armour is attributed to its innovative use of fabric technologies, eco-friendly operations and high brand recognition, from both professional athletes and local communities.
The brand product repertoire includes items like athletic shoes, t-shirts, jackets, hoodies, pants, leggings, shorts and accessories such as bags, gloves, caps and protective gear. Additionally, Under Armour produces American football, basketball and soccer uniforms, among other sports. The expansion of apparel lines TurfGear, AllseasonGear, and StreetGear further gave an impetus to the brand in the flourishing apparel industry.
Under Armour essentially manufactured apparels for men, mainly for the bulky type. Realising the need to produce women athletic clothing to fill the gap it wasn’t serving, Under Armour worked to reframe its image as a malecentric brand. Thus, it launched their Women’s Performance Gear product line in 2003. Interestingly, Under Armour’s first patent was for a sports bra. Consequently, Women’s apparel grew to around $500 million, compared with total apparel sales of over $1.76 billion. The brand also faced a challenge it needed to address when it was said that their clothes need to be more fashionable; to produce more clothes that people can wear outside the gym. The sportswear landscape is taking a shift, where customers want stylish athleisure and no longer want athletic clothes just for working out. Considering the fact that the company can’t rely solely on its performance wear, Plank admitted,
“ We need to become more fashionable with the products we have out there. ”
The brand, though in the fitness category, has also branched out to cover a wider range of services. UA is also a tech company and hence has launched its own fitness app called Record that has over 130 million users across its apps network. Moreover, UAA has spent $710 million on acquiring other apps, including MapMyFitness, Endomondo, and MyFitnessPal.
8. Promotional efforts
One reason behind Under Armour’s rapid upward growth is the way it promotes itself. In the year 2016, the sportswear company invested about 478 million U.S. dollars in marketing activities. It also believes in directto-consumer marketing by cutting out the middleman thus allowing the brand higher margins. At the same time, it also gives the brand the flexibility to freely experiment with merchandising and flow of products, and carefully craft its message to target specific groups of consumers both domestically and abroad.
Under Armour focusses a lot on athlete endorsements and has had roped in Olympians Lindsay Vonn, Michael Phelps, golfer Jordan Spieth, pitcher Clayton Kershaw, quarterback Cam Newton for its campaigns. In addition, Tom Brady, his wife Gisele Bundchen, and many more have endorsed the brand. The well-researched strategy has helped the company emerge as a leader in sports because of the success of the athletes that endorse the brand.
The brand has been a sponsor for many events to increase its visibility. As of 2012, Under Armour is the sponsor of the Baseball Factory’s “Premium Video Program”. The brand is also big on social causes with UA Give Back – Under Armour’s effort to become involved in different facets of the world community. They have different branches in their organization that specialize in each cause that Under Armour supports consisting of – UA Power in Pink, UA Freedom and UA Win Global.
9. Inside the company
The US Headquarters are located at Baltimore, Maryland.