Under Armour Inc. founder Kevin Plank is stepping aside as head of the company he started in his grandmother’s basement, elevating the executive he brought in two years ago during a painful restructuring of the apparel maker.
Patrik Frisk, Under Armour’s president since 2017, will become chief executive officer on Jan. 1, the company said Tuesday. Plank, 47, will remain head of the board, taking the title of executive chairman.
Under Armour shares rose as much as 4.5 percent in premarket trading. The stock had climbed 14% this year through Monday, trailing the 20 percent gain of the S&P 500 Index.
The CEO change comes at a logical time. Plank led Under Armour through a multiyear restructuring that he’s called one of the most challenging periods for the company. Frisk, an apparel industry veteran, came aboard in June 2017 to retool Under Armour’s distribution strategy and develop its long-term growth plan.
With Under Armour ready to switch to offense from defense—amid lingering doubts about its direction—Plank made the decision to step aside.
“As my partner during the most transformative chapter in our history, he has been exceptional in his ability to translate our brand’s vision into world-class execution,” Plank said of Frisk.
Frisk, 56, has been in the apparel and footwear industry for more than three decades, including a three-year stint as CEO of Aldo Group Inc. Prior to that he held a variety of executive positions at VF Corp., manufacturer of popular brands including Timberland and the North Face.
As part of the transition, Frisk will keep the title of president and join Under Armour’s board.
“The opportunity that lies ahead of us is incredible,” Frisk said in a statement. “As our entire global team continues to lean hard into our transformation, I am honored to lead this great brand toward the realization of its full potential.”
Plank started Under Armour in 1995 while serving as a captain of the University of Maryland football team. Frustrated with the performance of his cotton undershirt, Plank set out to make one that was lighter and would stay drier. He has said that first product was the launch of a new category in sports apparel—performance apparel.
Plank has been chairman and CEO since 1996. He also served two stints as company president, from 1996 to 2008, and again from 2010 to 2017. He’s overseen the company’s move to Baltimore—from a Washington row house owned by his grandmother—and its expansion into a multibillion-dollar business. Under Armour went public in 2005 and experienced rapid growth, with sales increasing to $5 billion in 2017 from $1.1 billion in 2010.
But the company has sputtered in recent years. Increased competition at home led to falling domestic sales—and little growth over the past 2 1/2 years. In response, the company wrote down inventory, reworked its supply chain and eliminated about 40 percent of its products to focus on the top-selling lines. The stock, once a highflier, fell a total of 65 percent in 2016 and 2017.
Recovery has been slow. While competitors embraced casual consumers and the rapid growth of “athleisure” apparel, Under Armour remains dedicated to Plank’s original goal of billing itself as a performance brand.
Last year, the company cut 3 percent of its global workforce, or about 400 jobs. It also slowed spending on big-ticket sponsorships, such as the 10-year apparel agreement with Major League Baseball, which the company backed out of before the partnership was set to launch.
Analyst Sam Poser of Susquehanna Financial Group said last week his proprietary checks showed the company still losing shelf space at sporting-goods and family-footwear retailers.
“The bottom line, despite operational improvements, is that the Under Armour brand image continues to lose its luster, in our view,” Poser said. “The obsessive focus on performance products limits the consumer base, as most sneakers and sports apparel are worn for comfort and style, not for the actual intended use.”
—Bloomberg News
