US-homegrown sportswear brand Under Armour was founded in 1996 by the former captain of University of Maryland’s football team, Kevin Plank, in his grandmother’s basement. Having first-hand experience with clothing unsuitable for sweaty sports led him on a path to find a better fabric.

The first T-shirt from the brand was made from moisture-wicking fabric, which contained fibers that drew sweat off the skin for faster evaporation. It was the perfect material to keep athletes cool and dry.

In the first year, the company generated $17,000 in revenues by selling it to college football teams.

Under Armour sales

Two years later, Under Armour signed its first league-level deal to become the official supplier for NFL Europe in 1998. Fast forward to 2005, after the company struck deals with media powerhouses like Warner Bros, ESPN, NBC, and organizations like NHL, MBL, and USA Basketball — it eventually went IPO and raised $157 million .

In 2010, the company’s annual sales topped $1 billion for the first time.

Confident with double digit growth in the last few years, Under Armour eyes an aggressive $10 billion valuation in 2020, up from the $4 billion valuation in 2016 but with recent headlines reporting the company’s decline in quarterly sales for the first time, is the goal feasible?


Under Armour underwent scrutiny after posting its Q3 2017 earnings report, revealing the company’s first quarterly sales decline (-5%) since going public in 2005. The news drove the company’s stocks down by more than 20%.

Under Armour sales

Under Armour’s growth has been going down after hitting its first $1 billion revenue in 2010. Source: Quartz

Citing the weakening sportswear market in North America, Under Armour is joined by Nike in the disappointing growth of this quarter. But is it really lacking consumer demand when competitor Adidas successfully grew its business in North America by 32% in the first half of 2017?

Under Armour CEO Kevin Plank admitted that the company celebrated fast growth too early.

“I think we probably were a little braggish,” said Plank.

“This is now about more than external factors; it demonstrates issues with the brand and its proposition,” wrote Neil Sanders, Managing Director of research firm GlobalData Retail.

Another analyst from the firm also mentioned that Under Armour “does not have the clarity or a sense purpose in the way that Lululemon or even Nike does.”

In the US, the company is mostly a wholesale brand and heavily dependent on its wholesale partners, which made up 65% of its 2016 revenue. Meanwhile, its direct-to-consumer (DTC) segment — a mix of the company’s offline and online footprint — only contribute 31% of the revenue.

So when the partners are getting disrupted by online and their retail stores are closing down , the company’s performance is also highly impacted — or to quote Quartz :

“It’s selling products that customers aren’t buying, at stores where they’re not shopping — and when they’re shopping, they don’t want to pay full price.”


“Under Armour is not so broken that it cannot be fixed. But the days of glory, when it would post double-digits uplifts in sales, are over. Now is the time to work out, slim down, and become more competitive,” said Sanders.

To face the ‘ difficult environment ’ that the company will likely face into the next year, Under Armour needs to reduce its cost structure and restructure the business in a way that suits the pace of the company’s not so rapid growth anymore.

Plank declared 2017 to be a reset year for the company and announced it was going to cut 2% of its global workforce (roughly 280 job cuts), mostly at its HQ.

“After 6.5 years of more than 20% top-line growth that ended in the fourth quarter of last year, we are clearly operating in a different environment, particularly in our largest market (of) North America,” said Plank.

Not all is bleak for Under Armour. Although North America slumping its sales in the international market is exceeding expectations with 35% quarterly revenue growth to $350 million.

The company also plans to put more focus on its direct to consumer segment, especially ecommerce.

Under Armour’s direct-to-consumer sales, including ecommerce, grew 15% year-on-year while overall sales decreased 4%. – DigitalCommerce360

“We’re protecting and prioritizing international expansion, ecommerce development, footwear design development, areas like that while we continue to dig in deep and kind of right-size the cost structure,” said CFO David Bergman.

In Asia , the company saw 89% of sales growth in Q2 to $93.6 million, driven by customers from China, Taiwan, and Korea. The company’s interest in Southeast Asia has also increased . The company, through retailer Triple , plans to open 35 stores in total across the region including Vietnam, Brunei, Indonesia and Thailand.

“Establishing the retail network in rapidly growing markets such as Southeast Asia is regarded as the key element to leverage this brand marketing strategy,” said Toshi Sakurai, GM of consumer service Mitsui APAC (invested in Triple, the sole operator of Under Armour Asia).

Under Armour sales

Under Armour online stores in Southeast Asia are operated out of Singapore.


“As we look to close out 2017, we do not expect these conditions to improve. And although it’s too early for us to provide an outlook for fiscal 2018, our initial assumptions anticipate continued strength across our international and direct-to-consumer businesses,” said CEO Kevin Plank.

Double-digit growth again on its home turf might not be in the cards for the company anytime soon, but with a $231 billion global appetite for sportswear growing steadily, Under Armour only needs to play to its strength in the international arena.

Here’s what you should know today.

1. Nike will soon sell you shoes on Instagram

Nike revealed its plan during an earnings call last week. It’ll join other select brands like Kate Spade and Warby Parker in using Instagram-style posts to advertise its products and make it simple for people to buy them.

Partnering with the social media platform seems like a sensible strategy for a brand that seeks to reach young consumers. Instagram’s popularity with “tweens” and other highly sought-after demographics is fairly well established at this point.

Nike has been zoning in on digital sales, most recently confirm that it will soon sell on Amazon.

Read the rest of the story here.


2. Amazon adds South Korea to international expansion plans

Amazon is poised to disrupt South Korea’s ecommerce, the seventh largest market globally and the third largest in Asia.

A great majority (60%) of online shoppers in South Korea use mobile to get online. These days, beyond Amazon, e-commerce in the country is dominated by daily deal site WeMakePrice, eBay-owned Auction Co and 11Street.

Some observers believe Amazon is more likely to expand into large markets with fewer logistical barriers, as with its March acquisition of Middle East e-commerce marketplace Souq for an undisclosed sum and its recent move to set up operations in Australia.

Read the rest of the story here.


3. Gucci now lets consumers in China shop its collections online

Gucci revealed to its Chinese fans this week it’s now giving shoppers in China access to purchase its full range of fashion, handbags, accessories, and jewelry directly from its online store.

Gucci’s revamped ecommerce site, which heavily focuses on visuals and product story-telling to engage the consumer, lets shoppers make purchases online using localized forms of payment, including Alipay and WeChat.

On WeChat, Gucci has been leveraging the platform’s online-to-offline capabilities to grow its following and learn more about its customers. This year, the brand has hosted several events across Asia, including the recent art exhibition “Blind for Love” that gave Gucci fans a look into the world of the brand’s creative director Alessandro Michele.

Read the rest of the story here.

Here’s what you should know today.

1. Siam Commercial Bank and Ripple Launch the first blockchain powered payment service between Thailand & Japan

Siam Commercial Bank (SCB), in collaboration with Japan’s SBI Remit, is using Ripple’s blockchain enterprise solution to power real-time remittance payments between Japan and Thailand.

Approximately 40,000 Thai nationals currently live in Japan, making it one of the largest sources of foreign nationals in the country. Total remittance flows from Japan to Thailand are roughly $250 million a year.

The rollout of this new service begins today, and supports individual funds transfers in JPY in Japan to THB in SCB savings accounts in Thailand.

Once sent into blockchain network, the funds are credited to a SCB recipient’s account within two to five seconds or about 20 minutes to complete the transaction, a significant uplift compared with the up to two business days it currently can take for a payment to be made between the two countries.

Read the rest of the story here.


2. How Nike is using digital channels to drive sales

Nike is trying to seize control of its customer data to stay ahead of its rivals. The company gave observers a close-up of its plans in its latest quarterly results.

App-based commerce is surging for Nike, with online sales doubling in two years to more than $2 billion, and app users spend nearly triple what they do on, according to the company, an ominous sign for retailers that could be bypassed by this trend.

Nike’s in-app and online experiences must offer strong value, though, as they pit Nike against a new set of competitors like running and cycling tracking app Strava and YouTube workout tutorials, said Paul Jakimciw, group CEO at innovation agency KBS Albion.

“If they’re focusing on true digital transformation, I expect to see big in-store innovations such as paying through an app or at least order history integration with online and offline,” says Chris Hassell, founder of Ralph Creative.

Read the rest of the story here.


3. Recommended Reading: Music and atmosphere big factors in choosing brick and mortar

A recent Mood Media survey of over 11,000 shoppers examined consumer preferences when shopping in brick-and-mortar stores. Predictably, 72% of U.S. consumers said they made the trip to a physical location in order to touch and feel the products.

In particular, the study reveals how important atmosphere can be, especially for younger consumers. According to Mood Media, one in three U.S. consumers aged 18-24 cite the “atmosphere and experience” of a store as their top reason for shopping in-store versus online.

Importantly, it’s the youth who are leading the charge for better in-store experiences. In addition to preferring physical stores, millennials in particular are seeking out brands with which they feel an emotional connection.

These preferences may be recorded from the US, but can also be applied to customers in Southeast Asia. As omnichannel retail picks up, stores of the future, regardless of geography, should pay attention to consumer data in order to adapt.

Read the rest of the story here.

There’s no escaping Amazon. The online retail giant is everywhere, making headlines every week to announce either a Whole Foods takeover, a Prime Wardrobe program or a discount Prime membership for those in welfare.

All in a month’s work for Amazon.

The e-tailer is responsible for 43% of online sales in the US, and 11% of total retail sales in the country – it’s no wonder brands are wondering whether they should be joining Amazon’s army or facing ecommerce head on.

One brand that has jumped ship is the mighty Nike, who recently confirmed its partnership with Amazon through a pilot program to ‘test the waters’. However, an ex-Amazon employee expressed that this may not be the best move for the shoe brand.

Quote: Elaine Kwon, founder of Kwontified

“Most brands don’t think about it this way, but when you are directly wholesale, you forfeit any and all pricing control, and it becomes problematic because of the way Amazon matches prices — not just across the site, but from across the web,” says Elaine Kwon, former Amazon employee.

However, it’s important to note that Kwon is referring to a series of luxury, designer brands such as Gucci and Versace, fashion houses that spent years building their brands, but were affected by Amazon’s price markdowns.   

According to Kwon, Amazon’s wholesale arm actually leaves many companies bleeding because of its pricing strategy. Scott Galloway, founder of business intelligence firm L2 has called Amazon an “evil empire”. This is partly due to the fashion industry’s perception of Amazon, it’s like a dirty little secret in the fashion industry, high end brands do sell on Amazon, but only small selections, as they don’t want to be seen as selling out on a platform that promotes cutting prices.

So why would Nike still want to work with Amazon?

For one, the brand will be exposed to Amazon’s 80 million US Prime members, potentially rolled into the Prime Wardrobe offering (adidas is) and be able to maintain a level of control over the gray market for sneakers on the online marketplace.

But truthfully, sites are struggling to combat Amazon’s web traffic.

It’s a gamble either way and a decision that many companies face as e-tailing rises in popularity, even in developing markets like Southeast Asia aren’t exempt.

Marketplace strategy in Southeast Asia

Lazada, one of the region’s most popular marketplaces, is undoubtedly similar to Amazon. The site in Thailand clocks in around 40 million visits per month and has $2 billion in backing from China’s own ecommerce behemoth, Alibaba.

With Lazada moving closer towards a Tmall model, in which brands can design their own store on the marketplace and optimize the various features that Lazada provides, the marketplace is becoming even more attractive for brands.

Lazada Thailand-Unilever shop-in-shop

Despite the marketplace partner perks, brands should care about fully owning their online presence, and that means consumer data, design and marketing initiatives. A marketplace presence can be viewed as a short term strategy, something like a testing ground or accompanying channel alongside launching a direct-to-consumer website.

Granted, this is the ideal case for global brands with deep pockets.

US eyewear startup Warby Parker’s direct to consumer model, selling directly to your shoppers has long-tail benefits.

So who wins? Sometimes the brand but one thing’s for sure, the marketplace always wins.

Here’s what you should know today.

1. Singaporean-founded gaming firm Razer files for IPO in HK

A preliminary filing by Razer for a listing in Hong Kong shows that the Singaporean-founded gaming tech company has been piling up losses even as its revenue grows.

Last year, Razer’s net loss widened to $59.7 million, from $20.4 million in 2015, it said in a draft prospectus lodged with the Hong Kong Stock Exchange on Thursday.

Razer said its losses may continue as money is ploughed into expansion.

It plans to introduce new products and services to diversify revenue, including those with which it has little or no prior development or operating experience.

The global games market generated $101 billion of revenue last year and is the fastest-growing segment in the entertainment industry,according to a Frost & Sullivan report.

Read the rest of the story here.


2.  Overview: The emerging portrait of Gen Z

Goldman Sachs researchers say that the Gen Z cohort now matters more. That’s because “[their] diversity, fluency with technology and conservative attitudes toward money will have profound social and economic implications,” analyst Christopher Wolf said in a presentation.

Jason Dorsey, co-founder of The Center told Mobile Marketer that moreover, it’s a group that will rely on debit payment systems, not credit cards, and could be expected to lease cars or lean more on Uber or Lyft.

Gen Z has begun to turn away from fashion with prominent brand logos, according to Dorsey. “Gen Z is the first real social media generation. They are constantly putting photos up, and as a result when you have a clothing item readily identifiable it goes out of style faster. With three views you can’t wear it anymore.”

When shopping in stores Gen Zers expect retail associates to be on their game. So to win with Gen Z, retailers must be sharp with both the in-store and online shopping experiences.

How will this shift affect marketers and retailers?

Read the rest of the story here.


3. Recommended Reading: Why the Nike-Amazon deal may hurt sportswear retailers 

The sporting goods market is already in deep trouble, with several retailers already filing for bankruptcy, and Nike’s deal could push existing retailers to shut more stores, analysts say.

The deal — which is expected to help Nike Inc weed out counterfeit products sold through unlicensed dealers online and give it more control over its distribution — lifted the company’s shares to a more than three-month high on Friday.

The decision of Nike considering to sell directly to the consumer and that too with Amazon, they’re all getting nervous.

Sporting goods retailers, which rely on Nike for a substantial part of their wholesale revenue, would be hit further in case Nike’s partnership with Amazon expands beyond the current pilot program.

“The limited-edition market is store-driven,” said Maya Mikhailov, cofounder of mobile retail app developer GPShopper.

“What makes limited edition so exciting is finding out about the deals that stores have through their apps, going to the store, and the consumer being a part of that whole in-store experience.”

Read the rest of the story here.

Here’s what you should know today.

1. Nike confirms it’s opening up an Amazon shop

CEO Mark Parker has confirmed the companies are currently testing out a partnership.

 “We’re in the early stages but we really look forward to evaluating the results of the pilot,” Parker said.

Nike’s products can already be found on Amazon via unlicensed and licensed third-party vendors.

But with a direct partnership, Nike will be able to “elevate the way the brand is presented” by gaining more control over how its products are marketed on the site, Parker said.

Parker added that Nike plans to make “big shifts in the year ahead to our business,” indicating Nike’s partnership with Amazon is part of an effort to revamp its sales tactics as brick-and-mortar retail continues to suffer.

The partnership could mean bad news for sporting good retail stores, such as Dick’s Sporting Goods and Hibbett Sports. An Amazon strategy could also mean that Nike has to accommodate the online retailer’s price cuts.

Read the rest of the story here.


2. Delivery Hero’s valuation surpasses $5B following successful IPO

Delivery Hero’s valuation topped $5 billion after the food delivery firm went public in a listing on the Frankfurt stock exchange.

Delivery Hero earned around €465 million ($530 million) from the IPO, which it plans to use to repay loans and invest in growth. That’s in contrast to US food delivery outfit Blue Apron, which endured a rocky start to life on the NSYE less than 24 hours earlier.

 Despite a successful public debut, Delivery Hero is not profitable.

Read the rest of the story here.


3. Recommended Reading: The retail apocalypse might just mean the reinvention of the shopping experience

While the giants are falling, smaller players are figuring out how to reinvent the store experience for the 21st century, focusing on authenticity and community while, in many ways, thinking about sales second.

“I’m not seeing the retail apocalypse in the world of creative, small entrepreneurs,” says Sarah Filley, a co-founder of Popuphood, a residency program for retail helping small businesses in the Bay Area. “There’s such an incredible spirit here. People are looking at suburban malls and calling it the end of an era. If you look at the startup scene in retail, there’s so much energy.”

What unites these three concepts is their focus on the human factor. While many big retailers are cutting staff, smaller-scale startups believe that in the race to “out-Amazon” the online giant, focusing only on digital forfeits their competitive advantage.

Read the rest of the story here.