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.


Started by a former Japanese military officer Kihachiro Onitsuka in 1949, the brand Onitsuka Tiger was born in hopes of raising the spirit and health of the postwar youth in Japan through athletics.

The first shoe ever developed by the brand was for basketball with anti-slip sole and a suction patterning on the outsole, which would remain an iconic staple in future designs.

The company later branched out to develop a running shoe that prevented blisters and managed to convince even the legendary Olympic-champion barefoot runner Abebe Bikila to wear shoes for the first time in his running career.

The brand gained global popularity for its premium performance running shoes during the 1966 pre-trial for Olympics 1968 in Mexico. The introduced shoe, formerly known as Limber, adorned the distinctive crossed stripes that became the trademark of the brand.

ASICS brand series

The original ‘Limber’ edition that was renamed Mexico 66 to mark its rise to fame. Credit: size?.

In 1977, the company changed its name to ASICS after merging with sportswear-manufacturer GTO, and knitwear-manufacturer Jelenk. The name is an acronym derived from the latin phrase ‘Anima Sana in Corpore Sano’ — a sound mind in a sound body.

The ‘Onitsuka Tigers’ are now the ASICS vintage line and still offered at stores.


ASICS has successfully created a name for itself among amateur and professional athletes as a trusted performance brand through a range of high quality footwear made for running, tennis, wrestling, and volleyball.

Alistair Cameron, CEO of ASICS EMEA, admitted, however, that the brand was only ‘internally’ well known. More than half of the participants in the 2011 New York marathon wore ASICS running shoes but not everyone could identify the brand.

The company decided to increase its reach by focusing on lifestyle-oriented products to become known for more than just a good running shoe.


In 2013, the brand launched a year-long multi-channel global campaign called ‘The Journey of Improvement’ that was delivered across television, print, and ASICS’ social channels.

Aimed to encourage people to develop and improve their exercise regime with the slogan ‘Better Your Best’, ASICS emphasized the importance of tech and product innovation to stimulate, motivate and inspire others.

ASICS brand series

ASICS video campaign showing its product in everyday scenarios.

The company also launched its mobile app MY ASICS in 2013 to complement and improve its training program. The app was able to track the runners’ time and distance and customize training to fit each runner, greatly improving a user’s experience.

In addition to enhancing its digital capabilities, ASICS decided to appeal to new demographics. By combining sports performance and the distinctive cult cumulated by Onitsuka Tiger sneakerheads, the company introduced the label ‘Asics Tiger’ to serve the luxury sports lifestyle market.

Asics Tiger offers trendy designs and collaborates with famous domestic and overseas sneaker boutiques including Colette in Paris, Slam Jam in Milan, and Patta in Amsterdam to target the younger, more fashionable, and streetwear conscious enthusiasts.

An example of this is the Gel-Kayano Trainer Knit that ASICS is marketing through a series of videos highlighting creatives around the world – wearing the Knits, of course.


ASICS brand series

First promotional video for Gel-Kayano Trainer Knit featuring video stars London-based model and visual artist Daniel Pacitti. Source: ASICS Youtube.

ASICS brand series

Asics Tiger concept store in Japan.

“We wanted to evolve the core of the brand’s heritage. To achieve this, we designed a bold graphic type that can be broken apart and layered over image,” expressed Laura Stein, Creative Director of Brau Mau Design, the company in charge of keeping Asics Tiger fresh.


“Our aim is to now make it [ASICS] become more attractive among sneakerheads and squad leaders,” commented Luca Bacherotti, Regional Managing Director South Europe ASICS.

In order to do so, the company has made use of different labels to target different audiences:  ASICS, Onitsuka Tiger, and Asics Tiger. They give the company image flexibility among audiences and still market the quality they are known for.

“Our strategy is about being number one in running. That won’t change – but there’s a natural affinity to running and other sports. Three out of four people who buy ASICS (products) use it for sport. That’s almost double the rate of the market, which is more like four out of 10 because people use them for leisure also,” said Max Keen, Marketing Manager for ASICS.

In Q1 2017, the company’s consolidated net sales were down four percent due to weak results in the US and Europe whereas, Asia saw an increase of 11.3%.

ASICS has already opened more retail stores in Asia Pacific, including India, Korea and Singapore, as the majority of its sales came from brick and mortar.

ASICS believes that identifying an underserved populace is the key to in-person shopping.

“Around 15-20% of our total sales in the country (India) comes from the online and ecommerce channel while the remaining comes from the physical stores and that is where our focus is. But we are happy with our online sales number,” said Rajat Khurana, Managing Director of ASICS India.


The company’s goal is to change the ratio of revenues from its lifestyle labels to 40% from the current 20% ratio.

With the rise of athleisure in retail, customers are placing more importance on meaningful brand identity to choose what to wear and ASICS have taken the necessary steps to evolve its brand story.  

The company seems to be running on the right path in line with Nike and adidas by showing full dedication to multi-channel and will continue to be under the spotlight as a Gold Sponsor for the Tokyo 2020 Olympics.

Here’s what you should know today.

1. Facebook Live auctions come to Singapore

Several wholesalers and auction houses in Singapore are now regularly conducting auctions via Facebook’s live video streaming feature, Facebook Live.

Would-be buyers don’t have to be physically present at the event, but they still get to participate in the bidding process – and enjoy the banter of the auction room – as if they were right there.

Grunge Bidding MobCube, Hong Heng Mobile Auction, Live Bid Win, SG Auction House, andelectronics wholesalers Urban Lion are among the retailers that started running Facebook Live auctions in Singapore earlier this year.

Read the rest of the story here


2. Alibaba sales forecast tops all estimates as new forays pays off

Alibaba forecasts 45 to 49 percent revenue growth in the year ending March, sustaining a near-unbroken run of 40 percent-plus annual rises and underscoring how investments into businesses beyond its bread-and-butter of online shopping are paying off.

To reflect an increasingly diverse customer base, Alibaba will start reporting “active consumers” as opposed to just buyers, Chief Financial Officer Maggie Wu said during the company’s annual investor-day conference Thursday. It’ll begin to disclose “customer management revenue” instead of just online marketing, to reflect a broader base of advertising platforms.

“Its market valuation has fallen behind Tencent’s recently, so the forecast could inject some confidence,” said Ray Zhao, an analyst at Guotai Junan Securities Co. “This will be good news for its share price, which could rise 6 to 7 percent based on this forecast,” he added without specifying a timeframe.

Read the rest of the story here.


3. Recommended Reading: Nike and Adidas are making huge investments that should terrify Under Armour

Adidas has reacted to this strongly, with 80% of Adidas’ sales in 2016 from products that were less than a year old. Adidas’s products are very on-trend, which is contributing to a staggering run of growth, especially in the US where it is growing much faster than a sluggish Nike and an even slower Under Armour.

In order to better react to chasing trends, Adidas is looking to create a “flexible” supply chain.

Both Nike and Adidas have increased capital spending, and Morgan Stanley estimates Nike spent “~$2.5 billion on research and development in the last five years.”

Under Armour has lagged behind Nike and Adidas in innovation. Shares have declined 45% in the past year, compared with Nike staying flat and Adidas gaining 30%.

Read the rest of the story here