Inside Under Armour’s Plan To Make The Next Viral Sneaker
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Kevin Plank believes Under Armour has what it takes to make another hit shoe.
“Everybody’s walking around with that [potential winning] lottery ticket in their pocket,” the brand’s founder and executive chairman told FN, during an exclusive interview at the company’s Baltimore campus in January, where the brand shared a look at its footwear lineup and strategy for 2024.
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To the executive, that ticket might be Under Armour’s new SlipSpeed mega, set to launch in February, or perhaps its new Infinite Pro running shoe that launched in January. To be sure, the company isn’t just relying on the luck of draw to find its next footwear hero. Instead, it’s going all-in on a new strategy for product design in 2024 that emphasizes lifestyle.
As a performance brand that got its footwear start in cleats in the early aughts, Under Armour’s shoe presence has been slow to pick up steam outside of team sports for younger consumers. Its $1.5 billion shoe business represented about 25 percent of its total revenues in 2023, compared with the much larger Nike, whose shoe revenues make up more than half its business. The goal for Under Armour is to continue to grow footwear’s share of the total business.
Meanwhile, teen consumers have been elusive. Perhaps even more problematic, the brand missed the boat on the lifestyle trend, a story that became even more pronounced in the pandemic and defined the success stories of Lululemon, Hoka and On.
As Plank put it, “We don’t feel like we’ve played our best game yet.” But now, Under Armour’s executive team has a plan to revamp its products, including footwear, in line with a broader renewed emphasis on “sportstyle” — or sporty looks that live in a more casual setting, à la athleisure.
Within footwear, the company is investing in new design talent with lifestyle expertise, representing a major shift for a brand best known for its performance-focused gear. Under Armour’s chief executive officer, Stephanie Linnartz, who is almost a year into her stint at the company, sees this shift toward more casual, street-focused looks as a natural response to changing consumer behaviors. “There’s this blur now between style, sportstyle, performance and work,” Linnartz, who joined Under Armour from Marriott, told FN in an interview. “They want it all. They want performance and they want [it to be] good-looking. And our job is to give consumers what they want.”
That means dominating the tunnel walk, the off-season athlete and the average lifestyle consumer who wants a comfortable, stylish sneaker. And on a broader level, better products — and more heat — can mean big wins for Under Armour in the crucial region of North America, where revenues declined 1 percent in 2023 compared to the prior year.
“We need to create more brand love here in America,” Plank said. “And we need to do that through amazing product and story.”
Investing in talent and product
Under Armour has bolstered its fashion-forward mission with several high-profile hirings. The brand tapped rock ’n’ roll-inspired menswear designer John Varvatos as chief design officer in September; and Puma’s former head of sportstyle, footwear Yassine Saidi, started as chief product officer in January. Under Armour also announced in January that it plans to hire a chief marketing officer and a head of footwear.
“With any company, it starts with having the right people in the right jobs to drive the kind of results you want,” Linnartz said.
As for product, the lineup for 2024 includes several new silhouettes that pick up on popular footwear trends in the market. The brand is releasing a revamped version of its Apparition performance run shoe from 2008 with HOVR cushioning technology in spring ’24. While Under Armour is not as old as other legacy shoe labels, this sneaker taps into the retro trend that competitors like New Balance have benefited from in recent quarters.
Under Armour is also launching a court shoe this fall that appears to take notes from Nike’s mega-popular Air Force 1 franchise.
The lifestyle lens will be evident in the brand’s newest iteration of the UA SlipSpeed — the Mega — which launches in February. This performance training shoe initially launched in 2022 with a convertible heel design, made for young athletes who crush the heels of their sneakers after their workouts.
Linnartz described the newer Mega version as having a slimmer silhouette and a higher heel, making it a shoe people can wear during a run or to just “kick around with your friends at Starbucks.”
She added, “Our goal is to have performance based apparel and footwear that’s awesome for athletes, but also well designed and beautiful and stylish. And that’s kind of how we’re thinking about footwear.”
Winning sneaker culture
Under Armour’s footwear journey began with a niche: football cleats in 2006 and baseball cleats the following year. The brand eventually made its way into running and basketball, where it has seen some wins over the years. The UA Flow Velociti Elite running shoe adorned the feet of Sharon Lokedi when she won the New York City Marathon in 2022. And in basketball, the successful partnership with NBA star Stephen Curry has been a category-defining win.
But Under Armour never managed to come out with a true “premium” product that sits at a higher opening price point and is coveted by sneakerheads, explained Spurwink River advisor Matt Powell. “They never captured the imagination of the sneakerhead in high school and college,” Powell said.
Tapping into the ever-profitable world of sneaker culture is a top priority for 2024. This depends on generating a high level of brand heat and fine-tuning a distribution strategy that always keeps demand a little ahead of supply.
“It’s got to be a scarcity story, where they’re not trying to make millions of pairs of shoes,” Powell said. “They’re going to need to make small numbers and have those shoes sell out and create heat.”
Under Armour has told Wall Street in recent earnings calls that it is targeting a range of higher-end distribution partners that live in the mall, specialty run and boutique space. Linnartz also gave a keynote address to retail leaders who attended the National Retail Federation’s Big Show in January.
“It starts with great product. Then you need to market it and you need to get it on the right shelves,” Linnartz told FN.
Progress is already being made when it comes to strengthening brand equity, according to Williams Trading analyst Sam Poser.
“In the near term, the product is improving and the distribution is becoming more controlled,” he wrote in a late January note. “Such improvements are enough to steady the ship.”
While wholesale makes up about 60 percent of business — a split the company sees as ideal — Under Armour is also strengthening its direct to-consumer channels. Its U.S. loyalty program launched last year and surpassed 1 million members in its first few months. When it comes to the target consumer, Under Armour is going all-in on women, particularly the 16- to 24-year-old female varsity athlete.
Linnartz sees footwear as a crucial avenue for growing the company’s women’s business in the long-term. Women’s was less than a quarter of revenues as of November. The brand wants to grow that business to 50 percent over the next few years by finding synergies across several categories.
“Footwear, women’s and sportstyle are not mutually exclusive,” Linnartz told analysts in May, when she defined the product strategy for 2024 as revolving around these three elements. Within women’s product, Under Armour has recently focused more on creating shoes designed specifically for the female foot, as opposed to adapting a men’s model.
As Under Armour leans into the sportstyle category, the brand isn’t letting go of what gives the company its soul: performance. It is refining its sports categories like running and basketball to core silhouettes that maximize function and comfort. Within sportstyle shoes, Under Armour is infusing performance innovations into the construction of these trendier looks.
“We’re always going to be core to our DNA and our heritage, which is performance,” Linnartz said. “We are for athletes. That’s why we exist. And that’s always going to be at the heart of what we do.”
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