Under Armour's new CEO could usher in a fresh era for the retailer, but completing its turnaround will 'not be an easy task,' experts say
- Under Armour CEO Kevin Plank announced on Tuesday he would be stepping down and moving into a role as executive chairman and brand chief at the company.
- We asked experts to weigh in on the larger implications of the leadership shift and how executive changes could play a role in revitalizing the brand.
- Experts were split, with some saying the move is smart in positioning Plank in a more behind-the-scenes role with more time to strategize around reinvention, while others said it was a missed opportunity to bring in new talent.
- Visit Business Insider's homepage for more stories.
In the wake of the announcement that Under Armour CEO Kevin Plank will be stepping down, experts say new leadership has the potential to revitalize the beleaguered brand, but it will not be an easy battle.Patrik Frisk, who currently serves as Under Armour's president and chief operating officer, will effectively take over as CEO on January 1, as Plank steps out of the spotlight and into a new role as executive chairman and brand chief.Advertisement
Plank has been at the helm since 1996, including recent challenging years at the company that resulted in dwindling revenue growth and $1.3 billion in unsold merchandise in 2018.
"New leadership needs to be focused on rebuilding Under Armour's quality image of the full product line in order to regain consumer brand perception," DiGuido wrote in an email to Business Insider. "This won't be an easy task at all."Though Frisk certainly has the business acumen - including more than a decade at VF Corporation, where he helped to revitalize Timberland - his biggest challenge will be fixing Under Armour's recent reputational woes. DiGuido said this will involve overturning one of Plank's biggest missteps: pushing Under Armour into lower price point retailers like Kohl's, an effort that ultimately diluted the brand's value. "The move to go down market as opposed to maintaining the high quality and higher end garment positioning in an effort to scale was the wrong decision," DiGuido wrote. "The Kohl's move made Under Armour look like a store brand with cheaper price positioning, in the interest of scale."Advertisement
Alternatively, Libby Delana - cofounder and creative director at the marketing agency Mechanica - said Plank's repositioning could be a strategic move for the founder to dedicate more time to a revitalization by shedding some of the C-suite-level responsibilities.
"It is certainly possible that by moving to executive chairman he will be able to reinvigorate the brand by having the time to [envision] the future versus running the day-to-day," Delana told Business Insider. "Plank is known to be a very passionate, aggressive, and innovative entrepreneur - all attributes that will be required to navigate the dynamic, ever-changing athletic landscape."
David Gaspar, managing director at investment firm DDG, echoed Delana and said the transition will likely prove fruitful in repositioning Plank in a role where he has more creative leeway and ability to breathe fresh life into the brand.
"I don't see this as a shake-up, but more as an intentional and organized inevitability of the business," he said. "The interesting story will be told in the coming quarters as Plank continues to focus on Under Armour's vision and leaves the day-to-day management to his successor."However, DiGuido said Under Armour missed an opportunity to bring in an outside innovator, someone with fresh blood who could bring instrumental change to the brand. Advertisement
"Hiring folks that are 'veterans' in the sportswear and apparel industry isn't the ticket," he wrote. "Under Armour needs a team focused on upsetting the Apple cart and building new channel relationships with today's audience."
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