Look out Air Jordan.
This week, Golden State Warrior athlete Stephen Curry became the latest athlete to debut his own brand in partnership with a major athletic label—Under Armour. The deal is similar to Nike’s with Michael Jordan and Lebron James, widely considered to be the two greatest basketball players of all time. Curry’s a fitting addition to their ranks: While who rounds out the top three is often debated, Curry is overwhelmingly considered a first ballot hall of fame contender.
The Curry brand may be even more significant for Under Armour than for the athlete himself. Curry’s been with the athletic label since 2013. Given Under Armour’s woes in recent years, the launch of a full-fledged Curry brand may go a long ways towards restoring the brand’s image. Ultimately, thanks to the NBA star’s a squeaky clean reputation, Curry’s association could be provide a shot in the arm for Under Armour’s growth.
The announcement comes a little more than a year since Under Armour founder Kevin Plank stepped aside as CEO and handed oversight of the company’s day-to-day operations to Patrick Frisk. Plank said he made that decision in part to focus on branding and to develop a long-term vision for the company as brand chief and executive chairman. He claimed that the move was part of a plan he set in motion when he hired Frisk as president and COO in 2017.
While that may be the case, it’s also true that Under Armour has produced uneven results since 2017.
For the first quarter ended March 31, the company swung to a net loss of more than $2 million compared to net income of about $19 million the same period a year prior. Meanwhile, Under Armour’s revenue increased 7% to $1.1 billion during the same time frame. To put that slowing growth in greater context, revenue grew by 30% the same period a year prior to $1.05 billion. It marks the point where the company went from double-digit growth to single-digit and posted losses, which ultimately led to a restructuring and layoffs. (Those difficulties also likely spurred Frisk’s hiring, due to his strong background in operations after stints as the CEO of the Aldo Group and an executive at VF Corp.)
In addition, the brand has been criticized for creating a “toxic” corporate culture, as evidenced by a 2019 lawsuit against the company claiming racial discrimination and allegations in 2018 of sexual misconduct.
Covid-19 has only complicated the brand’s comeback efforts. Under Armour has managed to maintain its revenue, which was flat at $1.4 billion for the third quarter ended Sept. 30, at the same level over last year. Due to a falloff in sales during the depths of the pandemic, however, the brand’s sells are projected to decrease a high-teen percentage rate compared to 2019 results.
While that’s admittedly an achievement in the midst of a pandemic, it’s still under threat from rivals such as Lululemon, upstart DTC brands such as Vuori, Cuts Clthing and Mack Weldon, and athletic giants such as Nike, who all threaten to steal marketshare given their investments in technology and aggressive marketing.
Having a vaccine in sight shifts the brand’s priorities away from the pandemic and towards the future. With that, there’s space for the Curry brand to address those issues of long-term growth and the need to improve the company’s image.
For one, footwear is currently contributing most of the growth in terms of absolute dollars at Under Armour. Sales in that division grew 19% in the third quarter alone, constituting about $300 million of Under Armour’s total revenue, even as apparel sales declined 6% to $927 million. (The sale of accessories at Under Armour was up some 23% compared to the same period a year ago, to $145 million.)