Retail News CRM

Tag: under armour

  • Under Armour raises forecasts amid supply chain snafus

    Under Armour raises forecasts amid supply chain snafus

    Under Armour on Tuesday raised its full-year forecasts, alleviating investor concerns regarding holiday inventory shortages flagged by nearly all its peers and sending its shares up 16 percent.

    Factories in Vietnam, where Under Armour sources about one-third of its products from, have begun reopening after months-long shutdowns that have caused severe distress to many apparel brands.

    Bigger rival Nike Inc has cut its fiscal 2022 sales estimates, expecting delays during the holiday season, while Puma SE advised people to shop early for Christmas.

    “Nearly all factories that Under Armour does business with, including those in Vietnam are open,” finance chief David Bergman said, noting port congestion and container availability at some Asian ports have improved.

    Under Armour still had to cancel some spring/summer 2022 orders to ease pressure on the factories that will take until the year-end to ramp-up to full capacity, it said.

    It also warned of a hit to its revenue in the first half of 2022 before the challenges, including congestion at U.S. ports, start to dissipate.

    However, analysts have said Under Armour, which has deployed pricier air freight to bring in goods, is navigating supply-chain challenges well.

    They also believe the athletic wear boom that is helping Under Armour, Nike and Adidas AG could last at least through next year.

    Under Armour has also been spending more on marketing, pulling out of discounter stores and sharpening its focus on its own stores to elevate its brand image.

    “UA remains one of the few that successfully raised its pricing power, rather than simply enjoyed higher prices on lower industry promotions,” brokerage BMO Capital Markets said.

    The athletic wear maker said it expected 2021 adjusted per-share earnings to reach 74 cents, above Refinitiv IBES estimates of 55 cents, after it posted better-than-expected third-quarter results.

    Lees ook:

    Lees ook:

  • Under Armour sales down with almost 25%

    Under Armour sales down with almost 25%

    Under Armour sales fell 23 percent in the first quarter, with about two-thirds of the decline attributed to the Covid-19 pandemic.

    The sports-apparel manufacturer and retailer recorded a loss of $589.7 million for the quarter after restructuring charges of $436 million were included.

    Total sales were $930 million, with wholesale revenue down 28 percent and direct-to-consumer revenue down 14 percent.

    Under Armour sales were down by 34 percent in the Asian market

    “During the first quarter, our results in January and February were tracking well to our plan,” said Under Armour president and CEO Patrik Frisk.

    “Since mid-March, as the pandemic accelerated dramatically in North America and EMEA and retail store closures ensued, we’ve experienced a significant decline in revenue across all markets. As a result, like so many businesses, we’ve had to make very difficult decisions, including temporarily laying off teammates in our US retail stores and distribution centers, along with other actions to ensure we protect Under Armour’s financial stability.”

    In China, which accounts for about half Under Armour sales within Asia, the Covid-19 pandemic saw both company-owned stores and partners closing from late January, reopening from late March. By the end of that month, about 80 percent of stores had resumed trading.

    “However, traffic in these locations, while recovering steadily in recent weeks, continues to be down year-over-year,” the company said in an earnings brief.

    “Business results and trends in South Korea have been similar to those in China, while retail and partner locations outside of these countries in the Asia-Pacific region have remained predominantly closed since the end of the first quarter.”

    Frisk said Under Armour management was taking decisive actions to continue the company’s transformation and improve efficiencies so it emerges from the restructure and the pandemic “with stronger and greater capabilities over the long-term”.

    Lees ook:

    Lees ook:

  • Under Armour Asia-Pacific sales surge, but coronavirus impact looms

    Under Armour Asia-Pacific sales surge, but coronavirus impact looms

    Under Armour Asia-Pacific sales surged 9.8 percent in the December quarter – a far greater growth rate than the global 3.7 percent.

    The sportswear brand, which is struggling to turn around its sagging North American business, also suffered a $15 million net loss for the quarter, largely due to a $23 million tax expense.

    Under Armour Asia Pacific sales rose to $183 million and were up 11 percent on a currency-neutral basis, while global sales reached $1.44 billion, up 4.1 percent after currency adjustment.

    The company says the improved performance in Asia was due to growth in just wholesale volumes and direct-to-consumer (DTC) sales. However, the company noted that DTC performance was softer than expected due to poor performance in “key e-commerce moments” of 11.11 and 12.12 sales.

    CEO Patrik Frisk told an analyst conference call he was “not satisfied with where we are today” despite improvements in systems and infrastructure serving the wholesale and retail network.

    The company’s share price fell 17 percent after the results were released in the US yesterday, accompanied by an admission the company was considering closing its Fifth Avenue flagship store as part of further restructuring initiatives to boost performance.

    “As a brand, we see a paradox of two challenges in front of us,” Frisk said during the call. “Continued softer demand in North America, as we work through our elevated inventory and multiple years of discounting, and a highly committed cost structure which is taking longer to unpack and is limiting us from being able to spend as aggressively as we would like to increase brand consideration.”

    He also warned that the coronavirus crisis in China would significantly impact results in the current first-quarter and may cause supply-chain challenges for the full year. Some 600 stores – two-thirds of its Asia-Pacific network – are currently closed in China and Frisk expects Under Armour Asia-Pacific sales to fall by between $50 million and $60 million due to the virus.

    “Given the ongoing uncertainty, it is possible that this situation could have a significant material impact both financially and operationally on our full year, including the potential for additional top-line contraction for Under Armour.”

    Lees ook:

    Lees ook:

  • Under Armour Singapore showcases Rush

    Under Armour Singapore showcases Rush

    Under Armour Singapore has partnered with Celliant to create performance apparel line UA Rush and Recovery.

    Designed to enhance performance, the collection includes men’s and women’s fitted tees, long-sleeved shirts, leggings and tights and more.

    All pieces will range from S$69-$199, and are now available for purchase on Under Armour Singapore’s online store, retail stores in Orchard Central, Bugis Junction, VivoCity, and through authorised Under Armour resellers.

    In conjunction with the launch, Under Armour is hosting an admission-free “Rush & Recovery Experience” at Orchard Central Discovery Walk until May 2.

    The interactive exhibits bring to life the inner workings of Rush technology. Distinct experiential zones will showcase how the technology generates performance improvements for the wearer, and helps power recovery.

    Another zone, “Test of Will”, features Under Armour’s annual advanced urban fitness challenge where visitors can see a preview of this year’s unique challenges and put their grit, strength and determination to the test.

    Under Armour’s Rush-and-Recovery-engineered fabric promotes improved performance and energy return. It is intended to provide the same benefits to the body as an infrared sauna.

    “The introduction of UA Rush is our commitment to giving athletes 360-degrees of training support both in the gym and beyond,” said Dan Leraris, GM of men’s training at Under Armour.

    “With the launch of UA Rush, we now complete the training cycle – there is now UA gear designed to optimise human performance at every training occasion.”

    Under Armour athletes from around the globe have been training in UA Rush including Singapore Athletic Association athletes such as swimmer Amanda Lim, marathon runner Jasmine Goh, master coach at Ritual Gym, Shrek Ismail, and SuperheroRunners founder Nelson Wong.

    Lees ook:

  • Train like Elite Athletes at Under Armour’s Rush & Recovery Experience

    Train like Elite Athletes at Under Armour’s Rush & Recovery Experience

    From the brand that first revolutionized the athletic wear market in 1996 by introducing sweat-wicking fabric, Under Armour is once again changing the performance apparel game. In partnership with Celliant, Under Armour has created UA Rush and Recovery, its newest performance apparel line designed to be worn at the time of sweat as well as post-training, and scientifically designed to enhance performance.

    In conjunction with the launch, Under Armour will be hosting the Rush & Recovery Experience, a series of interactive exhibits that bring to life the inner workings of RUSH technology. The event opens today and will run till 2 May 2019 at Orchard Central, before touring around Singapore.

    Distinct experiential zones will showcase how the technology not only generates performance improvements for the wearer, but also powers their recovery. See energy waves emitted by your body with the Under Armour Hex and observe your body’s natural heat radiation at the infrared RUSH booth.

    At the last zone, get a taste of the upcoming Test of Will, Under Armour’s annual advanced urban fitness challenge. Users will get a preview of this year’s unique challenges and put their grit, strength and determination to the test.

    Under Armour’s UA RUSH brand ambassadors Stephen Curry (left), Kelley O’Hara (middle) and Anthony Joshua (right)

    Find out how Rush elevates the training regiments of Under Armour ambassadors Stephen Curry, three-time NBA champion and two-time MVP; Kelley O’Hara, world cup champion soccer player; and Anthony Joshua, heavyweight champion of the world.

    The scientifically engineered fabric promotes improved performance and energy return. In simplified terms, it is intended to provide the same benefits to the body as an infrared sauna.

    Minerals found naturally in the earth are extracted and broken down into active particles, which are then melded together to form a proprietary blend. The blend is then infused into the fibers that are ultimately knit into UA’s high-performance fabrics that make up the gear in the collection.

    During performance, the body emits heat. The responsive fabric of the UA Rush & Recovery line absorbs that heat and converts it into infrared energy that is re-emitted back into the body. This recycled energy increases temporary localized circulation, promoting improved performance, energy and recovery. When worn, the apparel stimulates increased endurance and strength.

    Post-training, the soft bioceramic fabric of the Recovery line returns infrared energy to the body, improving blood flow and circulation for all-around recovery and faster rebuilding of muscle.

    ‘The introduction of UA RUSH is our commitment to giving athletes 360-degrees of training support both in the gym and beyond. With the launch of UA RUSH, we now complete the training cycle – there is now UA gear designed to optimize human performance at every training occasion,’ says Dan Leraris, General Manager of Men’s Training at Under Armour.

    Under Armour athletes from around the globe have been training in UA Rush for their biggest moments. Locally, Singapore Athletic Association athletes such as National Swimmer Amanda Lim, National Marathoner Jasmine Goh, Master Coach at Ritual Gym Shrek Ismail, and SuperheroRunners founder Nelson Wong have been given early exclusive access to train in Rush.

    The Under Armour Rush & Recovery Experience is located at Orchard Central Discovery Walk, and the public is welcome to visit from 23 April to 2 May 2019, between 12pm and 8pm daily. Admission is free.

    The UA Rush and Recovery collection includes men’s and women’s fitted tees, long-sleeved shirts, leggings and tights and more. All pieces will range from $69-$199 SGD and is now available for purchase at underarmour.com.sg, and at Under Armour retail stores in Orchard Central, Bugis Junction and Vivocity as well as authorized Under Armour dealers.

    Lees ook:

    Lees ook:

  • Aggressive expansion planned by Under Armour Asia

    Aggressive expansion planned by Under Armour Asia

    US sportswear brand Under Armour is expanding its operations in Asia, as well as Europe and Latin America.

    An Under Armour Asia headquarters is set to open in Hong Kong this year, as the brand strengthens its commitment premium-grade sportswear rather than follow the currently fashionable athleisure market.

    “As part of the transformation into this new operating model, one of the things that we wanted to do was to really empower our regions,” the firm’s president and COO Patrik Frisk said in an interview published by the South China Morning Post. “So we decided to move into an Apac, Latin America, EMEA and North America structure.

    “We weren’t able to scale our international business without giving the regions more horsepower to drive the business.”

    “China is the big machine in the region,” added newly appointed Under Armour Asia-Pacific MD Jason Archer. “If you combine a lot of the external focus on the region, as well as the Chinese government investing in sport, in health and wellness. That is just exciting for us – the macro landscape.”

    The firm’s international takings have been burgeoning overseas in comparison to their home market, with a 43.34 per cent increase seen internationally over just 2.63 per cent in North America. US sales remain double those globally, although last year Asian sales grew 61 per cent against a 5 per cent drop back home.

    Under Armour has a global network of 1100 stores, and plans to build a further 1500 locations within five years, with 73 per cent of these launching in Asia, mostly in China.

    Lees ook:

  • Under Armour Thailand eyes 20 per cent sales growth

    Under Armour Thailand eyes 20 per cent sales growth

    Under Armour Thailand is targeting a 20-per-cent sales increase in the kingdom, according to the brand’s exclusive Asian distributor Triple Pte Ltd.

    The company is focusing on footwear sales to follow up on its gains in the apparel sector in a sporting goods market expected to see 5–7 per cent growth this year. It will also offer a wider range of branded products, including sleepwear.

    “Under Armour is a relatively new brand in Thailand, and it has huge potential to spread its wings here,” said company CEO Michael Binger during a visit to Thailand last week. “We want to grow our footwear business at a faster pace than in the past and expect footwear sales to increase to 35 per cent of total sales by 2020, up from 25 per cent last year.”

    As part of this year’s expansion plans, Triple Pte is planning exploratory Under Armour Thailand outlets in the country’s north, with a shop-in-shop scheduled for the Mall Nakhon Ratchasima as well as a potential new shop in popular tourist destination Chiang Mai. It will also launch another branch in suburban Bangkok.

    “We see huge potential in the sporting goods business in Thailand,” said Binger, “and we feel confident in our capability to propel Under Armour to success here because we are an alternative brand for people looking for innovative performance shoes.”

    Thailand is Under Armour’s second fastest-growing market in Southeast Asia after Singapore.

    Lees ook:

    Lees ook:

  • First Under Armour India store’s a Fact

    First Under Armour India store’s a Fact

    Under Armour India is about to open its first store after testing the market online. According to Jason Archer, MD at Under Armour’s Asia-Pacific region, the company has set up a wholly owned Indian subsidiary. It will be led by former Adidas veteran Tushar Goculdas as MD.

    “We are investing in Asia Pacific as there are long-term growth opportunities. We have been concentrating in China over the last few years. Over the next couple of weeks, we will be establishing our retail presence in India,” Archer told.

    Under Armour India will start operations by opening stores in metro locations after assessing the market potential online through partnerships with Amazon and Flipkart-owned Myntra.

    “We will start operations by selling our global portfolio of training and running products,” said Archer.

    Lees ook:

    Lees ook:

  • Under Armour Thailand predicts sales growth

    Under Armour Thailand predicts sales growth

    Under Armour Thailand is targeting a 20-per-cent sales increase in the kingdom, according to the brand’s exclusive Asian distributor Triple Pte Ltd. The company is focusing on footwear sales to follow up on its gains in the apparel sector in a sporting goods market expected to see 5–7 per cent growth this year. It will also offer a wider range of branded products, including sleepwear.

    “Under Armour is a relatively new brand in Thailand, and it has huge potential to spread its wings here,” said company CEO Michael Binger during a visit to Thailand last week. “We want to grow our footwear business at a faster pace than in the past and expect footwear sales to increase to 35 per cent of total sales by 2020, up from 25 per cent last year.”

    As part of this year’s expansion plans, Triple Pte is planning exploratory Under Armour Thailand outlets in the country’s north, with a shop-in-shop scheduled for the Mall Nakhon Ratchasima as well as a potential new shop in popular tourist destination Chiang Mai. It will also launch another branch in suburban Bangkok.

    “We see huge potential in the sporting goods business in Thailand,” said Binger, “and we feel confident in our capability to propel Under Armour to success here because we are an alternative brand for people looking for innovative performance shoes.”

    Thailand is Under Armour’s second fastest-growing market in Southeast Asia after Singapore.

    Lees ook:

  • Why did Under Armour stock rise by 27% ?

    Why did Under Armour stock rise by 27% ?

    The sportswear maker, in the midst of a convincing turnaround this year, blew away Wall Street estimates in third quarter earnings reported this week and injected a dose of optimism into the stock market. Under Armour shares were up an overwhelming 27.82 percent.

    The broader index seesawed for much of the day but a late afternoon rally lifted it to a gain of 1.55 percent.

    While few companies this quarter have been rewarded for good financial results, Under Armour scored the trifecta: It beat estimates on earnings and revenues, and it raised forward guidance on profits by nearly 20 percent.

    Akamai Technologies also soared today on strong earnings.

    The online content delivery company beat earnings estimates by more than 10 percent and revenues by more than 1 percent on the strength of demand from video-gamers and cyber-security customers.

    The stock was up 16.92 percent.

    Tech services provider Cognizant Technology, on the other hand, saw its stock fall 3.9 percent — the biggest decline on the index — after it lowered fourth quarter guidance because of weak demand from bank customers.

    The broader technology sector rallied strongly with Twitter (4.54 percent), Facebook (2.91 percent) and Alphabet Inc. (1.58 percent) posting gains while Amazon.com (-0.55 percent) and Adobe Systems Inc. (-0.56 percent) had small losses.

    Chipmaker NVIDIA Corp. continued to play the tech sector pinball. Down 6.39 percent then up 9.36 percent.

    Telecom giant Comcast continued to draft off its strong earnings report last week and what appears to be a shift in the market to more defensive stocks with dependable outlooks.

    The stock gained 4.78 percent and is up more than 10 percent since it reported earnings last week.

    Lees ook:

    Lees ook:

  • Under Armour reorganises international executive team

    Under Armour reorganises international executive team

    Athletic apparel retailer Under Armour has announced new executive appointments for their international markets as it expresses plans to make its international sales grow even more.

    The company’s international sales have been growing fast and make up 24 per cent of its total revenue. In the first quarter, the sportswear retailer’s total sales were $1.19 billion.

    Under Armour has announced the appointments of Jason Archer as managing director for Asia Pacific; Manuel Ovalle as managing director for Latin America; and Massimo Baratto as managing director for Europe, Middle East & Africa.

    The company also announced that its Hong Kong office will be expanded to serve as its Asia Pacific headquarters.

    “As we work to scale our international business, we remain focused and measured in our evolution across our entire portfolio to ensure that we are driving toward long-term return for our shareholders,” said Patrik Frisk, Under Armour president and chief operating officer.

    Archer, who has been with Under Armour for six years, became vice president and managing director in 2016 with primary oversight of the company’s Latin American business. Before joining Under Armour he spent 11 years with adidas in Latin America and six years with PwC on assignments in Canada and Europe.

    Ovalle, who joined Under Armour in 2013, will now be based in Panama and be responsible for the company’s entire Latin America business from Mexico through the Southern Cone. Prior to Under Armour, Ovalle spent nearly 20 years with adidas with roles of increasing responsibility as the company grew its Latin American business.

    Baratto, who joined Under Armour in May, will now oversee the entire Europe, Middle East and Africa region. He brings nearly 30 years of international experience from a variety of industries, brands and regions – most recently as the CEO of the Oberalp Group.

    Erick Haskell, who joined Under Armour in 2015 as managing director for Greater China has announced plans to leave the company later this month to pursue a new opportunity.

    “We are grateful for Erick’s leadership and the strong foundation he set over the past few years, which has positioned us for strong, balanced growth as we enter our next chapter in this important region,” Frisk said.

    All regional leads report directly to Frisk.

    Lees ook:

    Lees ook:

  • Global Brands to Sell US Licensing Businesses to Differential Brands

    Global Brands to Sell US Licensing Businesses to Differential Brands

    Global Brands Group is to sell a substantial part of its North American branded business to Differential Brands Group for US$1.38 billion.

    The move, announced at the release of its annual results yesterday, will allow it to cut debt, pay a modest special dividend to shareholders and free capital to grow “a more focused business”, the company said. It will also result in about half of its 7000 staff leaving the company.

    Global Brands Group is currently carrying about $1.1 billion of debt, much of it related to its 2014 spin-off from Li & Fung and subsequent listing.

    The assets to be transferred include licences for Disney, Star Wars, Calvin Klein, Under Armour, Tommy Hilfiger, Bebe, Joe’s, Buffalo David Bitton, Frye, Michael Kors, Cole Haan, Kenneth Cole and the BCBG Max Azria label which it bought last year for $27.4 million after the company filed for bankruptcy.

    CEO Bruce Rockowitz said the sale was the outcome of a strategic review of the business.

    “We concluded that divesting the portion of our business that has a high present-day value, was the way to move forward. With this transaction, the group will be able to improve our balance sheet significantly and simplify our organisation, while focusing on the less established lines of business where we see high growth potential going forward.”

    Subject to shareholder approval, the deal will see Global Brands Group become “simpler, flatter and more nimble”.

    The company said that on the branded product side, the group’s European and Asian businesses will remain as before, while its US business will now focus on footwear and its remaining fashion business. Brand Management will continue to be managed on a global basis.

    “Looking ahead, we will continue to attract new licenses to our portfolio with a tighter and deeper focus on our businesses,” said Rockowitz. “At the same time, we will continue to improve the efficiency of our existing businesses, delivering synergies across our platforms. In addition, we have embarked on a significant cost reduction program across the organisation and we are committed to improving our cash flow via a combination of tighter working capital management, and even stronger cost discipline.”

    Revenue up but write-downs cost

    For the year to March 31, Global Brands Group increased its revenue by 3.4 per cent to $4.023 billion.

    However sales were impacted by Coach taking its footwear business in-house after their licence expired in June last year, and the cessation of the Quiksilver kids fashion licence when the company declared bankruptcy.

    Total margin increased from 28.5 per cent to 31.2 per cent, however operating costs increased by 37.3 per cent to $1.254 billion, driven largely by transition costs for new licenses in men’s and women’s fashion and additional operation expenses for running the new brands.

    The group also made one-off, non-cash adjustments in relation to impairments from the write-off of a receivable arising from a loan made by the company, and various intangible assets, which totalled $94 million.

    “In addition, taking into account this strategic divestment, the external market condition and business performance, the group performed an impairment test and recognised a non-cash goodwill impairment of $1.05 billion during the financial year,” the company said. That resulted in a net loss of $887 million for the year, however earnings before interest, taxes, depreciation and amortisation was steady at $379 million.

    Lees ook:

    Lees ook:

    Lees ook:

  • Asia Pacific helps Under Armour to get up

    Asia Pacific helps Under Armour to get up

    US-based sportswear brand Under Armour has unveiled better than expected first quarter revenue growth of 6 per cent to US$1.2 billion, as weakness in its home market was offset by growing momentum overseas.

    Asia Pacific was the strongest individual operating region for the business, with sales increasing by 28 per cent, currency corrected.

    However, Under Armour booked a net loss of $30 million in the first quarter, although excluding $37 million in costs associated with its restructuring plan net income was $1 million.

    North American revenue declined by 1 per cent in currency corrected terms while its international business saw sales increase by 27 per cent, up 19 per cent in currency corrected terms.

    Under Armour chairman and CEO Kevin Plank affirmed the company’s $20-30 million operating income guidance for 2018 on Tuesday in the US.

    “Our first quarter results demonstrate measured progress against our focus on operational excellence and becoming a better company,” Plank said.

    “As we continue to build our global brand by delivering innovative performance products to our athletes, amplifying our story, further strengthening our go-to-market process, and leveraging our systems to create even deeper consumer connections – we remain confident in our ability to deliver on our full year targets.”

    GlobalData Retail MD Neil Saunders said that while there are some positives in the latest result the figures still give the impression that the business has “run out of steam”.

    “Overall revenue looks good enough with a 5.8 per cent increase in sales,” he said.

    “However, all of this comes from newer markets where Under Armour is buying growth through expansion. There is nothing wrong with this strategy, but it comes with costs attached – which means the contribution to the bottom line is less than impressive.”

    Saunders says Under Armour’s poor performance is solely of the brand’s own making.

    “Within North America, we believe that Under Armour’s image is still off-pitch and that its brand strategy remains extremely muddled. Strategically and in terms of its store and distribution footprint, it is clear that Under Armour wants to be a strong lifestyle brand with a wide reach.

    Indeed, recent partnerships, such as the collaboration with rapper A$AP Rocky, suggest a push to appeal to younger demographics more interested in fashion than sports.”

    Saunders says most consumers do not see Under Armour as a lifestyle brand; they see it as a specialist sports performance brand.

    “This limits Under Armour’s ambitions and means that many of the lifestyle initiatives it pursues fall on stony ground. The brand needs to have a much clearer identity, possibility by using sub-brands, before it can gain wider acceptance. Throwing out new products and lines before this clarity is developed is folly.”

    He also believes “the masculine nature of the brand” has made it hard to expand its reach to women.

    “While store design, marketing, and products remain male-focused, Under Armour will continue to struggle with women. This is a lost opportunity as female sports and fitness remain a fast-growth part of the market.”

    He says Under Armour is paying the price for growing too fast and has too broad a set of ambitions.

    “The result is a company that lacks a clear vision or point of view. In today’s crowded marketplace this has made it indistinct and easy to overlook. Until this is remedied, growth will remain problematic.”

    Lees ook:

    Lees ook:

  • Under Armour Asia saves the brand globally

    Under Armour Asia saves the brand globally

    Under Armour Asia sales soared 61 per cent in the 12 months to December – a highlight in the US-headquartered sportswear retailer’s year in which it lost US$48 million.

    Global revenue was up a mere 3 per cent to $5 billion with the company losing ground in the wholesale sector, but raising its direct sales – which now account for 35 per cent of turnover – by 14 per cent.

    Asia was by far Under Armour’s top-performing market, with sales in Latin America up 28 per cent and in Europe, Middle East and Africa, by 42 per cent. It is in the company’s core North American market where the damage is being done – sales fell 5 per cent

    The loss was caused by restructuring costs and impairments of $124 million. Those excluded, Under Armour achieved an operating surplus of $87 million.

    While noting a small improvement in the company’s fourth quarter, retail analyst Neil Saunders, MD of GlobalData Retail, said the results “show signs of a company in difficulty”.

    Fourth-quarter sales rose 4.6 per cent, a sharp turnaround from the 4.5 per cent decline of the preceding quarter, but that growth came entirely from overseas markets, led by Under Armour Asia, up 66 per cent.

    “While overseas growth is to be applauded, it carries investment costs and also accounts for just 25 per cent of group revenue,” noted Saunders. “As such, Under Armour is reliant on its North American operation to drive performance on both the top and bottom lines. Unfortunately, the North American division had a lamentable quarter and is the main source of Under Armour’s woes.”

    Saunders said the brand has “lost power” in North America.

    “Compared to last year, Under Armour was firmly off the radar for holiday gifting. Far fewer people thought of or requested the brand for gifts, and consequently fewer people bought into it. Under Armour has spent too much time trying to expand its footprint and product coverage, and too little time building connections with customers.”

    He said Under Armour was failing in terms of customer experience.

    “Customer service at some of its own stores leaves a lot to be desired. Meanwhile, expansion into retailers like Kohl’s has weakened exclusivity and made the brand feel commoditised and ubiquitous.”

    GlobalData Retail’s consumer data reveals Under Armour has lost its way, with consumers unsure what the brand stands for, what it specialises in, and why they should use it.

    “For many, it has become something of an also-ran,” said Saunders. “These shallow roots are dangerous: they leave Under Armour vulnerable to competition and the vagaries of changing market conditions.”

    In contrast, rival Lululemon has a very clear sense of identity, and its approach is more disciplined and focused, which has helped it maintain price integrity and remain a destination of choice for many consumers.

    “While we do not believe that Under Armour should simply emulate Lululemon, we do think it can learn some lessons from its playbook.”

    Saunders said Under Armour has already warned of further full-year revenue decline in North America this year and operating profit will also be weak thanks to restructuring and impairment costs.

    “For all of this, Under Armour still has potential; but it needs to use the year ahead to regroup and rethink its strategy. The company that once believed it could challenge Nike has come down to earth with a bump. Humble reflection is now the order of the day.”

    Lees ook:

    Lees ook:

    Lees ook:

  • Hearables is the next big thing in wearables

    Hearables is the next big thing in wearables

    Specialised fitness wearables integrated into clothing and ear-based “hearables” will grow from an expected 4.5 million shipped this year to nearly 30 million in 2022, according to Juniper Research.

    This is an increase of more than 550 per cent, while by contrast, conventional activity tracker shipments will grow by only 20 per cent in that time.

    Hearables or smart headphones are defined by Wikipedia as “technically advanced, electronic in-ear-devices designed for multiple purposes ranging from wireless transmission to communication objectives, medical monitoring and fitness tracking”.

    In its report Health & Fitness Wearables: Vendor Strategies, Trends & Forecasts 2018-2022, Juniper says that as growth in basic trackers has slowed, session‑specific wearables, such as those monitoring gym or training sessions, have multiplied. Devices from companies like Atlas, Gymwatch, Jabra, Sensoria and Under Armour provide more granular metrics.

    It found that as detailed metrics become widespread among all vendors, lifestyle tracking leaders such as Fitbit and Huami will decline in market share. Combined, these players will account for 28 per cent of total fitness wearable shipments by 2022, down from more than 40 per cent last year.

    Data is now the key battleground for fitness wearables, says the report. Thanks to initiatives like Suunto’s Movesense platform, data will ultimately become device-agnostic. However, because of a lack of consumer interest, Juniper expects fitness software and services revenues to stay under $200 million a year over the next four years.

    Despite the promise of wearables in healthcare, little specialised hardware is available, with fitness wearables being adapted for such purposes. Juniper expects healthcare wearables to make up less than a third of all of the sector’s devices in use by 2022, as regulation slows roll-outs and keeps prices high.

    “Healthcare use has long been the goal of many wearables manufacturers,” says research author James Moar. “However, more research needs to be done on activity tracking in order to make typical wearable data clinically meaningful to healthcare professionals.”

    Lees ook: