Under Armour will turn its back on one of the biggest trends in apparel under its new CEO
- Under Armour CEO Kevin Plank and his soon-to-be successor, Patrik Frisk, laid out their plans for the future of the brand in a joint interview with Fortune on Tuesday.
- The duo emphasized that Under Armour would focus on being a performance wear company over anything else.
- This marks an important shift away from its strategy to double down on athleisure after analysts said it missed out on this important trend.
- Plank announced he would be stepping down as CEO on Tuesday.
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Wall Street criticized Under Armour for being late to the party when it came to athleisure. Now, it's making a bet that this trend won't last forever.
In a joint interview with Fortune on Tuesday, CEO Kevin Plank and his soon-to-be successor, Patrik Frisk, discussed the future of the brand following the announcement that Plank would be stepping down as CEO at the end of the year.
"It's about making sure we are focused," Frisk told Fortune's Phil Wahba in the interview. "The brand positioning is very clear for us: we're a performance company."
He added: "Besides, people want both performance and aesthetics in their athletic wear now."
This marks an important shift in Under Armour's strategy. After racing to jump on the athleisure trend following a period of intense criticism from analysts over missing out on it, the brand seems to be pulling back and instead focusing on its core offering: straight-up athletic wear.
This isn't the first time that management has discussed this change, however. At the end of last year, Plank said in an interview with The Financial Times that the company has lost focus and would go back to being a performance brand.
"If they [consumers] want to go sit on the couch they can, but that product was built to help them get through a 10-mile run," he told the Financial Times. "We don't dissuade them from doing it - we just need to know who we are."
He added: "We are a performance brand. That is what we're going to be and going to stand for, becoming the best in the world at that."
Athleisure has been a dominant trend in the athletics and apparel market over the past decade. Lululemon, the company that is often credited with inventing this trend, has seen explosive growth in recent years while revenues at Under Armour have declined. In its most recent earnings results in July, Under Armour missed revenue forecasts and said it now expects a revenue decline in North America for 2019, its third year running of declining revenues.
Making the decision to step back from the athleisure trend might not be a bad thing, however, if Under Armour has failed to make significant tracks in that area.
One analyst called out the downsides of trying to play catch-up back in 2017.
"It will take years for the category to have a measurable impact to the company with potential starts and stops along the way as lifestyle requires more trial and error and sample testing than core basic technical gear," Wedbush analyst Christopher Svezia wrote at the time.
While there have been mixed reports over whether the athleisure trend is possibly slowing down after growing at breakneck speed for the past decade, the market is clearly becoming more saturated, making it more competitive.
In any case, Plank has his sights set on more adventurous products that will "blow people's minds," he told Wahba. Plank will stay on as the company's executive chairman and brand chief.
"We want to continue to make products for people that they never knew they needed, and once they have them, they don't know how they could live without them," he said.