Under Armour to Restructure With Integrated Marketing Function and Slimmed Portfolio
The Under Armour brand requires recentering, according to Kevin Plank, president and CEO. As a result, the company is launching a Protect This House restructuring plan.
The company is rebuilding its core, focusing on three primary objectives: amplifying product demand and loyalty, optimizing and modernizing operations, and elevating consumer experiences.
During a recent call with investors, Plank said the company is making changes over the next 18 months to expedite go-to-market timelines with a smaller, more focused portfolio of products and new processes to introduce efficiencies across its operations.
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“Our current go-to-market has only one gear with an 18-month process to get a product from an idea to the selling floor. This is just playing uncompetitive in a 2024 landscape,” said Plank. “That said, we'll be pursuing a faster six- and 12-month go-to-market capability.”
Marketing in Focus
Operationally, the company is putting greater emphasis on marketing, resuming the search for a new chief marketing officer and consolidating the global and North American marketing teams for a more integrated approach that will result in expedited decision-making, along with more oversight on spending and ROI.
Under Armour is also cutting back on what it deems unnecessary external workforce, reducing the number of agencies, consultants, and outside experts, particularly across the marketing function.
A Slimmed Portfolio
As part of these efforts, Under Armour is reducing its SKU or style county by about 25% and cutting back on discounts in order to scale better offerings and drive balance into its segmentation.
“This will significantly reduce workloads for our teams, and allow them to focus and prioritize on making any product that comes from our engine excellent with a product and story that we will be proud of,” said Plank.
The company also has plans to build out a direct-to-consumer line of products exclusively for its own stores and e-commerce site.
More e-Commerce Changes
- More than 50% fewer site-wide promotional days than last year
- Reduction in the depth of discounts
- Improved online merchandising within a more engaging brand-building environment
- Reduced made-for-outlet products on the website
To support the new go-to-market timeline, the company will be improving its supply chain and end-to-end planning capabilities.
Under the new structure, said Plank, product, marketing, and sales will work as a collective to develop singular go-to-market strategies driven by technology and design. He expects the changes to also allow for greater visibility into category and product performance to develop greater agility across the enterprise.
“These initiatives, along with proactive moves to reduce discounting and promotions and a reduction in SKUs, gives us great confidence in our ability to improve ASPs and gross margin in the years ahead,” said Plank.
