Under Armour Is Not Cool Enough To Lose Young Consumers.

Has lost second of the United States

Chair.

According to the world clothing shoes and hats net, the brand founder and CEO Kevin Plank have also become big losers, and have recently been selected as one of the worst CEO of the year.

At the same time, there is also a list.

Department store SEARS and so on, but Kevin Plank is the only sports brand CEO.

Through observing stock price changes, revenues, profits and performance during the term, the media selected executives who considered serious harm to the company.

The Under Armour, which once splendor, declined 45% and its market value evaporated more than 5 billion US dollars this year due to declining sales. The company suffered losses for two consecutive quarters.

In the environment of fierce market competition, the loss of key wholesale customers, the decline of demand and the change of consumer taste, the brand has been working hard. At present, nearly 300 employees have been laid off and many executives have been lost.

Under Armour is losing young consumers if it is not cool enough to be left behind.

24/7 Wall St. analysis commented that Kevin Plank, in a short span of 20 years, turned the brand from a start-up into a strong company. This is a great story. However, in the rough waters, the founders of a company often do not necessarily become the best captains.

According to the third quarter earnings report released by Under Armour, sales fell by 4.08% to 1 billion 410 million US dollars, less than FactSet's expected US $1 billion 490 million, and net profit slumped 57.7% to 54 million 200 thousand US dollars. This is the first time that Under Armour has seen a decline in sales since it was launched in 2005.

Under for the first time in Armour10 invited actress as spokesperson.

Under the continuous pressure of profit margins, Under Armour is competing for the market share with the dominant Nike and Adidas brands.

But the media is still questioning whether the new president and retail veteran COO Patrik Frisk can bring changes to the company.

Patrik Frisk came from the Vans parent company, Wei Fu group. After taking office in July this year, he proposed a series of restructuring measures including strengthening women's, children's series and direct retail business.

At the beginning of August, Under Armour began to lay off and shut down some stores, and reduced its inventory to a record low.

According to the recent youth consumption report released by the US investment banking and Asset Management Co, the status of Under Armour in the hearts of American teenagers has been declining.

Under Armour ranked first among the high-income teenagers in the United States, "brands that haven't passed through the whole year," while Under Armour dropped to eleventh this year from the eighth most popular sports apparel brands of high-income families.

Meanwhile, in the minds of ordinary income families, Under Armour dropped from sixth to ninth.

Credit Suisse's Credit Suisse analysts have tracked the online sale of Under Armour products, and found that Under Armour has more than 1000 products sold on at least two websites, of which 268 products are sold on DicksSportingGoods.com, and 165 products are sold in FootLocker.com.

The industry pointed out that Under Armour network sales platform too much, the product structure is too single, it is inevitable to destroy the Great Wall.

Kevin Plank also admitted in the media interview that in recent years, the sports and leisure craze has brought many competitors to Under Armour, including brands like Lululemon and Fabletics. Over 200 sports and leisure wear brands have been competing for market share in the whole European and American market.

In order to re arouse the attention of young consumers, Under Armour, which has been the main professional sports and fitness product, followed the mainstream test of the most popular street corner style in May. It launched the Threadborne Shift shoe that subverted the previous design, and hip-hop singer Migos and others were publicizing it, but with little effect.

Some people in the industry say that Under Armour seems to be a bit too hasty in the younger product. If you can block the brand LOGO of the new shoe Threadborne Shift, you can't see that it is from the sports shoes of Under Armour.

Other analysts believe that Under Armour is bound to suffer losses in the age of retro sports. The Under Armour, founded in 1996, is "without the past." the Sportswear series of the main Lifestyle is not consistent with the brand positioning and the needs of the original consumers.

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As part of the restructuring, Under Armour is considering shutting down smaller categories such as tennis and outdoor.

When it comes to Under Armour's specific restructuring and reform strategy, Kevin Plank has made it clear that the brand needs to get rid of the difficulty of relying on sales promotion to get performance growth. As consumers demand for leisure products, the company will readjust its product mix and price reduction.

Under Armour estimates that the cost of restructuring is about $140 million to $150 million.

Matthew McClintock, Barclays Bank analyst, said in a recent research report that if Under Armour wants to better implement the restructuring strategy to stimulate sales growth, it is inseparable from the participation of professionals. He stressed that Under Armour is in the early stage of restructuring, so there is still a high volatility.

In view of the continued downturn in performance, Under Armour expects sales growth to slow down to low single figures this year, gross profit margin is expected to fall to 44.5%, and adjusted operating profit will be between 140 million and 150 million dollars.

Under Armour shares tumbled 23% on the day of the third quarter earnings report.

Chen Grazutis, an analyst at Bloomberg think tank, thought earlier that when the market trend shifted from functional to fashionable, Under Armour fell into a passive situation, which is the biggest challenge of Kevin Plank.

It is noteworthy that in the field of fashion industry, two CEO performed well.

CEO Pablo Isla, a fast fashion Zara parent company Inditex group, has been ranked one of the 100 best CEO in the world by Harvard Business Review this year.

Under his leadership, the Inditex group's market value approximated to 100 billion euros.

The other is GucciCEO Marco Bizzarri, who won the business leader award of the 2017 Fashion Awards again this year. Gucci belongs to the French luxury group. In recent years, it has gradually restored its leading position in the luxury industry in Italy. This year its sales have recorded an increase of more than 45% in the three consecutive quarter, and it has been earning more than Hermes in the two consecutive quarters.

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