In the summer of 2018, two senior Under Armor executives traveled to the west coast on a critical mission. Kevin Plank, founder and executive director of the sportswear company, and Patrik Frisk, its president and chief operating officer, needed to persuade Stephen Curry, the star of the Golden State Warriors and the company’s highest profile sponsor, to They will not abandon the brand.
The two sides had become increasingly frustrated with the relationship, said two former Under Armor executives familiar with the matter, who spoke on condition of anonymity to discuss the previously undisclosed meeting. In 2017, Mr. Curry made a public exception to a comment by Mr. Plank calling President Trump “a real asset” to the country, which led the executive to make a full-page newspaper ad to explain what he said. about Mr. Trump “did not accurately reflect my intention.”
But the relationship between the two remained tense. Plank was not happy that Curry, whose sponsorship agreement pays him millions of dollars a year, rarely wear Under Armor clothing for N.B.A. games. Mr. Curry was upset because Curry 3’s sales had been weak.
At the meeting, participants found a solution that would show how much Mr. Curry meant to the company. Mr. Plank and Mr. Frisk agreed to build a separate business around them, one that remembers what Nike had done for Michael Jordan two decades earlier. The company hired the former executive who had overseen the creation of the Jordan brand in Nike to lead the Curry brand and promised Mr. Curry much more participation in the development of his shoes. Mr. Curry decided to stay and a crisis was avoided.
Jeff Austin, Mr. Curry’s agent, declined to comment when asked about the meeting. A spokeswoman for Under Armor, when asked about the events, said Curry had been a “fantastic partner” for the past seven years and that the company was “excited about our future partnership plans.”
In his promise and his agitation, Under Armor’s relationship with Mr. Curry summarizes the company’s broader struggles in recent years, and represents a critical piece of his hopes for return.
Once announced as the next Nike, Under Armor has hesitated, hurt by the fall in sales and unflattering revelations about its corporate culture. It is clinging to the fiercely competitive sportswear market, even when it experiences the biggest change in management in its history. Investors, analysts and competitors wonder if Under Armor can be redefined successfully and once again win over consumers, or if the company’s best days are behind.
Not long ago, Under Armor was a favorite of investors. But since then it has faced tough scrutiny, which has resulted in lawsuits from shareholders, who accuse the company of cheating investors, and in media coverage around real estate businesses that involve the company. and the private properties of Mr. Plank. Questions have also arisen about a culture that allowed Visits to the strip club will be spent on corporate credit cards and, more recently, a revelation by the Wall Street Journal that federal authorities are conducting investigations into accounting practices.
It is far from 2015, when Under Armor, founded in 1996 as a manufacturer of high-tech sports equipment, had surpassed Adidas to become the second largest sportswear company in the United States by sales, just behind Nike. It published 26 consecutive quarters of revenue growth of 20 percent or more year after year, and its stocks doubled in two years.
The athletes he sponsored were among the most important names of the N.B.A. (Mr. Curry), the N.F.L. (Tom Brady), the major baseball leagues (Bryce Harper) and golf (Jordan Spieth). Under Armor signed U.C.L.A. to a sponsorship agreement worth $ 280 million, the largest for a university and a challenge to the dominance of Adidas and Nike in university sports. The dancer Misty Copeland gave the company a presence in the fine arts. He spent a total of approximately $ 700 million in the acquisition of applications such as MapMyFitness and MyFitnessPal, with visions of creating a mobile digital health and fitness community.
Now, revenue growth has plummeted, rising less than 1 percent in the first nine months of last year. The company’s stock price has collapsed to around $ 21 per share from a maximum of $ 51 in 2015. Worse, the brand is out of step with the consumer’s taste.
“The fashion cycle moved away from them. They stayed true to their muse, high performance footwear and clothing, ”said Matt Powell, an analyst at the NPD Group. “But that’s not where the business is. Right now, it’s about fashion and athletics.”
There is not a single cause of the Under Armor fights. Some factors, such as the bankruptcies of retail giants Sports Authority and Sport Chalet in 2016, were out of the company’s control.
But interviews with several current and former Under Armor employees, as well as with competitors, athlete consultants and financial analysts also point to a company that tried to do too much and too fast. He expanded to sports in which he had little experience and failed to articulate a strategy for his expensive technology acquisitions. He avoided the athleisure trend, which has boosted sales at Nike and Adidas, and struggled to translate his brand to an international audience.
And when Plank hired executives from Nike, Adidas and other places to help expand or fix crucial businesses, many said they were seen by Under Armor employees with a mixture of suspicion and disdain. It was a disconnection that was reflected in how Mr. Curry’s shoes were manufactured and marketed.
“Loyalty is good, but it can also create blind spots,” said Aaron Miller, who worked as a senior director of footwear at Under Armor from 2013 to 2015, after 18 years at Nike. Mr. Plank “was so loyal to the boys that they were there rather than when the Nike boys came in, all of a sudden, they were people inside and we were outside.”
This month, Mr. Plank, 47, officially resigned as executive director and was replaced by Mr. Frisk, 57. Mr. Plank now has the titles of executive president and brand leader, and Mr. Frisk reports directly to him.
Under Armor declined to make executives available to comment on this article. In a statement, a spokeswoman said the company was proud of the global brand that it continued to build and added: “Like the athletes we serve, we are very aware of our strengths and weaknesses and the inherent opportunities each time we train “. compete and recover. “
Since its inception, Under Armor left its mark as a sportswear company focused on technology. He not only made clothes for athletes; He made clothes that aimed to improve his performance. Starting with his first product, a sweat-removing shirt, Under Armor redefined the category, from its HeatGear and ColdGear fabrics in the late 1990s to, more recently, sleepwear intended to help athletes recover from a Great game.
With the increase in Under Armor shares in the fall of 2015, Plank and his principal lieutenants believed that nothing could stop the company’s rise. But others were less optimistic, concerned about the company’s growth culture and their lack of discipline around product planning and expenses would result in an adjustment of accounts.
That same year there was an internal debate about how many pairs of Curry 2 shoes to manufacture.
The first Curry shoe sold out immediately, and Mr. Miller wanted to double the number of Curry 2 shoes produced. He believed that this amount would also run out, increasing demand for the next model, Curry 3. But, he recalled, senior executives requested three times the amount of shoes he recommended, even when he argued that it could cause an excess.
The executives won, and the Curry 2 shoes finally flooded the market, ending on the sales shelves. It didn’t help that completely white low version He was ruthlessly mocked like a “dad” shoe. The large inventory combined with internal struggles and micro-management of shoe design set the stage for mediocre sales of Curry 3 in 2016, Miller said. In a 2017 earnings call, Mr. Plank blamed a “slow signature market” for the “softer than expected” sales of the shoe.
“It’s crazy. Why recruit talented and proven people and then not listen to them?” Said Mr. Miller, who left the company a few months later.
An Under Armor spokeswoman declined to comment on the debate over Curry 2.
Three former executives said that decisions about products were often driven by instinct, rather than market analysis by the consumer.
Two pointed to the DJ, a shoe without laces for women that, they said, sold poorly. However, the former executives said, the DJ could not be killed because he was named by Mr. Plank’s wife, Desiree Jacqueline Guerzon, who passes by D.J., and really liked the shoe.
Under Armor refused to answer questions about the shoe.
Under Armor’s rush to compete for college approval contracts resulted in other headaches. Under the terms of the contracts, he supplied t-shirts, booties and shoes for soccer and basketball teams. But he also had to quickly manufacture clothes and shoes for other sports, such as running and volleyball, in which he had much less experience.
A former executive said some university corridors sponsored by Under Armor refused to train in the company’s shoes because they worried they could get hurt. Instead, they took them to sporting goods stores and tried to exchange them for shoes from other companies.
An Under Armor spokeswoman declined to comment on their university sponsorship agreements.
In the past two years, Mr. Frisk, the new boss, received credit for introducing more controls around inventory levels, as well as greater oversight of expenses and product planning. These movements have already improved the profit margins of Under Armor.
The challenge now is to discover how to increase revenue and recover the magic that drove the meteoric rise of Under Armor.
Some Wall Street analysts are skeptical about an approach that focuses too much on products marketed to improve performance, especially for an audience that uses basketball shoes or sports pants to go to the supermarket or to the movies.
Still, Under Armor and Mr. Plank do not lose heart in their strategy. This month, the company launched its latest advertising campaign, “The Only Way Is Through,” with swimmer Michael Phelps, D.K. Metcalf of the Seattle Seahawks and other Under Armor-sponsored athletes sweating and panting through strenuous workouts.
“The world didn’t need another competent clothing or footwear manufacturer,” Plank recently told conference attendees of the National Federation of Retailers in New York. “What the customer needs is a dream.”