How is Under Armour Beating Adidas and other Consumer Sports Brands ? Watch out Nike !

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Photo Credit: UnderArmour

UnderArmour (UA) has become a $4B brand because a former University of Maryland special teams football player got tired of being the “sweatiest player on the field”  then started selling microfiber jerseys out of the trunk of his car. Founder Kevin Plank realized that the “wick and dry” fabric used in other clothing lines would be embraced by high intensity athletes and UA passed Adidas last year as the second largest sports apparel brand in the U.S. On consulting firm Prophet’s web site, partner David Aaker explained that the company turned up the S-Curve starting in 2003:

The first ad in 2003 featured Eric Ogbogu, a former NFL defensive end for the New York Jets, the Cincinnati Bengals, and the Dallas Cowboys and also one of Plank’s former Maryland teammates. He famously shouts “We must protect this house,” which has morphed into an emphasis on “I will.” This statement has broader relevance and goes beyond team challenges to individual ones. Back then, Under Armour strategically featured a few under-the-radar athletes in order to compete with Nike. These athletes exemplified authenticity and personality without being budget-busting. The brand also excels in product placement and is now opening a few flagship stores, including The Under Armour Experience in Shanghai that embeds the customer in a brand experience. Shades of Apple.

Since 2008, even the New York Times has followed UA with quarterly articles about their coups – from hiring Stephen Curry to showcase their basketball shoe line to signing a record co-sponsorship deal with UCLA, and on. Take a look at the Tough Mudder and Ridge Reaper stories on their website for exhilarating stories of #IWILL.

And the University of Maryland is now reaping the benefits of its alumni’s success, chronicled the Times last year as the Maryland Terrapins entered their second year in Big Ten college football:

Maryland is trying to emulate the University of Oregon, riding the largess of a multibillion-dollar apparel company to athletic prominence. Athletic departments throughout the country watched with envy in recent years as Phil Knight, a founder of Nike and an Oregon alumnus, donated hundreds of millions of dollars to help propel the Ducks from relative obscurity to the upper echelon of college sports. “We are the University of Nike,” Oregon declared unapologetically. Now, 2,800 miles east, Maryland is positioning itself as the University of Under Armour, thanks to the founder and chief executive of Nike’s ascendant rival.

The University of Maryland Athletic Department signed in early 2014 a 10-year extension on their $3.4M annual contract with Under Armour, according to Sports Pro Media. And now it has exclusive sportswear agreements with 19 colleges – the big rage for football teams last year was the ungrabble uniform. At the same time, UA is still 1/9th the size of Nike which is well established internationally as 56% of revenues were international in 2015:

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So what is the ArmourGrid technology: “the strongest, lightest, and most durable fabric” in athletic wear developed from engineering in reinforced concrete. Leading premium clothing suppliers such as Cabelas in hunting gear use UA’s UA thermography to keep hunters dry in the field. Cabelas has an impressive set of clothing technologies that it details here. UA details its HeatGear and ColdGear technologies that are big advances from the original microfibers used in the clothing sold out of Plank’s trunk two decades ago. And, importantly, Mr. Plank is a committed entrepreneur:  “Maryland is one of the greatest schools that we have in this country,” Mr. Plank said last year at a ceremony announcing the winner of Cupid’s Cup, an entrepreneurial competition he sponsors at Maryland’s business school (named for that long ago Valentine’s Day endeavor), “and it’s our job to show people why.”

 

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