Business "Downsizing" Will Be The Refinement Of UA'S Restructuring Of Overseas Markets And Key Categories.

"

You can try to do anything, but you can't do everything. "In September of this year, the United States

CEO Kevin Plank said at an investor conference.

Kevin Plank's ideas are being put into action.

According to the world clothing and shoe net, in October 17th, Jim Duffy, an analyst with Stifel, a US investment company, revealed in a customer report that in order to focus on basketball and other key areas, Under Armour is about to withdraw from some businesses.

Skiing, fishing tools, surfing equipment and fitness equipment.

As the scale of business reduction is large, this practice will largely lead to a decline in the operating income of US brands.

In this regard, analyst Jim Duffy predicts that in the next fiscal year, Under Armour's revenue will be reduced by 100 million to 200 million US dollars, which will be a challenge for a company that has always been a rating standard for revenue growth.

But at the same time, analysts agree with this approach, "after part of the business, the company will pfer these areas of marketing funds to a higher return on the global market.

This is the priority of resources and capital input we want to see. "

In fact, the "downsizing" of this business is the refinement of overseas market and key categories in the Under Armour restructuring plan.

After two consecutive quarters of losses, in August this year, Kevin Planck announced that the group was about to start restructuring, focusing on areas such as key markets, product categories and distribution channels. "In 2017, we hope to become stronger, more efficient and intelligent, while all kinds of sports, distribution channels and major markets will be optimized."

In order to get rid of the heavy dependence on the North American market, Under Armour has turned its attention to the whole world. In the future, it will focus on the potential overseas market. Its focus is on the bright Asian market, mainly in China and South Korea, and Latin America, which has yet to be excavated.

The second quarter shows that smaller share of international sales is a bright spot, including EMEA in Europe, the Middle East and Africa. Sales grew by 57% year-on-year, Asia Pacific grew 89%, Latin America grew 10%.

In terms of sports, compared with Nike's longer basketball and Adidas's heavier football, Under Armour has been criticized for launching too many types of products, but it always lacks key categories, so that consumers wonder what brands are good at.

So Under Armour proposed a more subtle way to manage products, focusing on basketball, male training, women, running and lifestyle five categories, hoping that they can bring long-term profitability.

Skiing clothing, skiing, fishing tools, surfing equipment and fitness equipment will be abandoned by American brands.

In the opening season, Curie wore Curry 4.

The category of basketball shoes is undoubtedly the top priority of Under Armour. In October this year, at the opening of the new season of NBA, the US brand launched Curry 4 signature boots.

After the third generation of products suffered from the cold market, Under Armour expects to take the fourth generation boots of the head card spokesperson back to the city, which will be available for sale in October 27th.

Randal Konik, an analyst at investment bank Jefferies, is optimistic about the new product. He wrote in the report, "through analysis of relevant data on retail stores, social media and resale platform StockX, there is a strong response in the market."

According to his description, Curry 4 has a premium of 80% to 100% on the resale platform, and product labels have been mentioned more than 5000 times on social networking platform Instagram, compared with Curry 3 has only been mentioned 28 thousand times so far.

Due to the high fever at the initial stage of sale and the lack of bright products in the new season, Randal Konik believes that the US brand is expected to rely on Curry 4 to reverse the decline of basketball shoes this year. He even used the evaluation of "top basketball shoes".

In the near future, the sales performance of Curry 4 will be the first important pcript that the US brand has announced after focusing on its key products.

However, Jefferies is one of the few optimistic agencies in Wall Street. The recent decline in share prices shows that investors are still taking a wait-and-see attitude.

So far this year, the share price of Under Armour has fallen by more than 40%, and there is no sign of obvious recovery.

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