A Company That Focuses On Improving The Performance Of Sports Equipment Will Grow Up?

At the moment of sports and leisure, the Under Armour, which was built in a tight compression garment and focused on functionality, encountered the first growth rate that has not been expected since listing. In 2014, Under Armour surpassed. Adidas It has become the second largest sports brand in the United States.

In the fourth quarter of 2016, Under Armour recorded a sales of US $1 billion 310 million, an increase of 11.7% over the same period last year. But this is less than analysts estimate of $1 billion 400 million, and this is the Nike Adidas's sportswear market split two times. brand For the first time since its listing, its growth has been lower than expected, and its average annual growth rate of 20% has been halted for 6 consecutive years.

For this reason, Kevin Plank has to admit that the brand product that he founded and wrapped in tight clothing is too functional. In a US investor conference call on January 31st local time, Plank, the company's CEO, admitted that Under Armour still lacks fashion in product design.

Why, then, is a company that focuses on improving the performance of sports equipment after a growing number of people love sports?

　　 It's all about sports and leisure.

According to the world clothing and shoe net, the three most expensive sports shoes sold in the United States in 2016 were Adidas's Superstar, CONVERSE's All-Star Ox Low and Nike's Huarache, which are at least more than 10 years in the market, and do not have many cutting-edge innovative technology products. This is also a situation that the sportswear industry has never seen in the past three years.

If you take a look at the representatives of sneakers in the past few years, they include Adidas's Coconut shoes and NMD, which has made PUMA proud of Creeper under the knife of actress Rihanna.

In common, the response of these shoes to social networks like fashion and Instagram is far greater than the endorsement of athletes. It is for this reason that Adidas, which has tasted the sweetness of the fashion industry, nearly doubled its share price last year. Nike, which emphasizes its superior product performance, has been downgraded by investment banks and analysts.

Adidas NMD, which uses BOOST technology, is no doubt the most popular sneakers in the past two years. It sold 400 thousand pairs in March 17, 2016 alone. Adidas recently introduced BOOST technology into another classic shoe SUPERSTAR, using the hidden BOOST sole instead of the rubber material.

Under Armour's story is not related to sports fashion. Kevin Plank is a craze for rugby fans. In some early media reports, he found business opportunities in this intense sport, which is a tight fitting sports underwear that can sweat quickly and keep her body dry at all times. Then he set up a Under Amrour with tights as her fist in 1996 and made it appear on rugby and baseball games.

In some marketing campaigns, Under Armour has highlighted the performance of its products to the extreme, with sweat absorbent polyester yarn and nylon as the main material, and even shouted that cotton is our enemy's slogan. This approach, like geek, has made Under Armour a representative of professional equipment, but it has not been very active in recent sports and recreational sports.

Under Armour started with tight fitting clothing, emphasizing product performance. Geek style publicity style once made it a representative of professional equipment.

Nowadays, people choose a set of sports equipment not only for playing a ball or running once, but when they go shopping or parties, they can all dress up in sports. Even young people in the gym have to secretly compete with each other. The Under Armour, which focuses on performance, does not seem so attractive when people wear tight pants and are more cool.

In a report on the poor performance of Under Amour in the fourth quarter, it quoted data from NPD, saying that 3/4 of sports shoes in the United States were not used for sports occasions, and Sam Poser, an analyst at Susquehanna Financial, said, "Under Armour is excellent on sports grounds, but it is not cool enough for young people."

In the history of Under Armour's 21 years of development, its most talked about story includes the robbed of NBA star Stephen Currie from Nike in 2013.

As NBA became the most valuable player in the 2014-2015 season and led the Jinzhou warriors to their first NBA championship since 1975, Under Armour's sales rose to the top.

In the fourth quarter of 2015, the "curry effect" increased sales of Under Armour footwear by 94.5% over the same period last year. In addition, it once squeezed Adidas from the market share of second in the North American market. It all shows that the niche brand that once concentrated on making tights has begun to challenge traditional brands.

At the end of 2013, Nike gave up the contract renewal contract with ankle injury. Currie then transferred to Under Armour for $5 million 500 thousand a year, and usher in a career explosion, which has increased the market value of Under Armour. Morgan Stanley analyst Jay Sole said in a February 2016 report that Currie valued $14 billion for Under Armour.

However, challenging traditional brands is not easy.

In the sportswear industry, the footwear business can bring higher profits to the company compared to the higher sales of clothing. The brand is also more willing to use the latest technology in shoes, so as to embody their advantages in technological innovation. Under Amour entered the footwear business in 2006. Although sales to the future account for only 20% of the total brand revenue, it has become the fastest growing business of Under Armour at an annual rate of not less than 30%.

The cost of entering the field of sports shoes as an important growth point is that Under Amour needs to face the strong competition between Nike and Adidas, which originally started with sports shoes, and invest more in research and development, sponsorship and other marketing channels, so that they can no longer lean on the corner of their most distinctive tights.

Compared with Nike's and Adidas's annual product lines on sports shoes and the endorsement of sports stars signed by them, Under Armour, which has become more extensive, has begun to appear mediocre. (from 2013 to 2015, Under Armour also acquired three fitness and calorie management App). While products are not fashionable enough to attract young people, Under Armour has not yet been attracted to geeks like other clothing businesses.

Under Armour has acquired three sports App, MapMyFitness, MyFitnessPal and Endomondo, which can record daily intake of calories, make daily fitness plans for users, or record all kinds of sports data such as running and riding. It doesn't seem like two things that you normally use.

　　 This new star seems overrated.

People seem to be keen on the story of taking the victory flag in the hands of the new star brand. Under Armour belongs to this category with its tight fitting clothing in the market, taking the star athletes from Nike and beating Adidas in the North American market.

The resulting high expectations make the Under Armour price earnings ratio 48 times, much higher than the industry average of 27 times and Nike's 24 times. Finally, when Under Armour had a problem with fashion sense, and last year its sales grew by only 16% after its sales increased by 16%, which accounted for more than 80% of its total revenue, investors also seemed to want to squeeze water into its high valuations. After the fourth quarter of 2016, the share price of Under Armour fell 20%, and in less than two months of the year, it had become second worst in the S & P 500.

In February, Kevin Plank, the founder of Under Armour, planted a bomb for him. He openly supported the new US President Trump, joined Trump's Commission on American manufacturing, and told the US media that "having a pro business president is a fortune (Asset) for the whole country. People should seize this opportunity".

Business people must be careful when they stand in politics. Kevin Plank is an example of "fire up".

On the social network immediately exploded, some people have launched a boycott of the Under Armour campaign, and this kind of campaign initially forced Uber's CEO Travis Kalanick to withdraw from Trump's economic advisory board, and even Under Armour's own spokesperson also played a negative tune with Plank.

Kevin's support for the controversial new president may make Under Armour worse in the future. But for its deep mire today, the fundamental problem is that people are more interested in sports than they are today, so they prefer to be more beautiful and able to make more beautiful pictures through sports or any other way.

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