Can UA Continue To Cool Down In The Era Of Fashion And Sports?

According to the world clothing and shoe net, Under Armour recorded its worst quarterly business since the fourth quarter of 2016, ending 20% consecutive 26 quarters of revenue growth.

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This sport is famous for its performance and technology.

Can it continue to cool down?

Although countless market reports, sports brands and entrepreneurs in sports industry are telling you that more and more people love sports, the whole sports market is getting better and better.

But at the same time, a sports brand with a strong trend was too professional.

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

The brand of Adidas's sportswear ripped off from the market for the first time has been lower than expected since its listing, and its average growth rate of 20% per quarter has been halted for 6 consecutive years.

(at the moment of sports and leisure, the Under Armour, which was built in a tight compression garment and focused on functionality, met the first growth rate since its listing.

In 2014, Under Armour surpassed Adidas to become the second largest sports brand in the United States.

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 caused by "sports and leisure wind".

In last year's article "Nike VS ADI, who is in the draught", we mentioned the influence of sportswear and leisure wind on the sportswear industry.

In the NPD statistics of the third party survey company, in 2016, the three most expensive sports shoes sold in the United States were Adidas's Superstar, CONVERSE's All-Star OxLow and Nike's Huarache, all of which are at least three 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 more than 10 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 undoubtedly the most popular sneakers in the past two years. It sold 400 thousand pairs on 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 the slogan "cotton is our enemy".

This kind of "geek" approach has made Under Armour a professional equipment representative, but it has not been very active in recent sports and recreational sports.

(Under Armour started with tight fitting clothes, emphasizing product performance. Geek style propaganda 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 fourth quarter performance of Under Amour, it cited data from NPD, saying that 3/4 of sports shoes in the United States were not used for sports, and Sam Poser, an analyst at Susquehanna Financial, said, "Under Armour is excellent on the playground, but it is not cool enough for young people."

From small brands to popular brands

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.

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At the end of 2013, Nike gave up the contract renewal contract with ankle injury.

Currie then pferred 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 JaySole said in a February 2016 report that Currie was worth $14 billion to 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 Map My Fitness, My FitnessPal and Endomondo three sports App, which can record daily intake of calories, make daily fitness plans for users, or record running, riding and other sports data.

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 UnderArmour's price earnings ratio 48 times, 27 times higher than the industry average and 24 times that of Nike.

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.

By February, KevinPlank, the founder of Under Armour, had planted a bomb for him. He openly supported the new US President Trump and joined Trump's Commission on American manufacturing, and told the US media CNBC that "having a pro business president is a fortune for the whole nation, and people should seize this opportunity."

(business people must be careful when they are standing in politics. Kevin Plank is an example of "fire upper body").

On the social network immediately exploded, some people have launched a boycott of Under Armour campaign, and this kind of movement originally forced Uber CEOTravisKalanick to quit Trump's Economic Advisory Committee, and even Under Armour's own spokesperson also played a negative tune with Plank.

Ballet dancer Misty Copeland mentioned in Instagram that she strongly disagreed with Plank's recent evaluation of Trump, and that diversity and inclusiveness were what she had always supported.

And Under Armour's spokesperson and NBA star Cooley said that unless "fortune" was changed to "shit", he could agree with Plank's (I agree with that description, if you if).

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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