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Under Armour suffers resulting in restructuring plan


Under Armour has made efforts to put itself on the same level as companies such as Nike and Adidas since its founding in 1996, however, the company’s growth in revenue has slowed tremendously and caused its stock value to plummet. In May of 2016, Under Armour took a blow when Sports Authority, a major outlet for the company’s products, filed Chapter 11 Bankruptcy. Months later in the fourth quarter of 2016, the company missed its targets, further damaging its stock value, resulting in projections for 2017 that were much lower than anticipated.

In early 2017 the company took another blow with regard to its celebrity endorsements. The company chairman Kevin Plank referred to Donald Trump as “bold” and “decisive” which generated considerable backlash from Under Armour’s main celebrity assets.

Around six months later, Under Armour is still suffering. Company analysts have described its decisions as lacking in focus, which could be what caused the 8.8% decrease in shares, moving the company closer to a four-year low. In response to these allegations of insufficient focus, the company has decided to concentrate on improving five categories of their athletic apparel: men’s training, women’s training, run, basketball, and lifestyle. Their hope is to increase demand for certain products, reversing last year’s trend.

Under Armour’s focus adjustments will not stop with their apparel. The company has created an entire restructuring plan which is, according to Market Watch, “aimed at enhancing operations, streamlining the company’s structure and increasing speed across different parts of the business.” Within this plan, the company is going to cut 2% of its global workforce, about 280 jobs. Around half of this number will come from its Baltimore headquarters.

Further explanation of the assertions that Under Armour has lost focus has been provided by Global Data Retail Analyst Anthony Riva, who wrote that, “While the overall brand remains visible, there is evidence to suggest that it does not have the clarity or a sense of purpose in the same way that Lululemon or even Nike does. Our consumer data indicate that many people are increasingly uncertain of what Under Armour stands for, or which parts of the sports market it specializes in.”

PHOTO COURTESY OF CREATIVE COMMONS

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