Under Armour’s Turnaround Strategy: New Product Lines, Restructuring, and Improved Margins
Under Armour, the American sports apparel and footwear company, is currently undergoing a significant turnaround strategy. The company’s revenues have been on a decline for the past few years, but CEO Kevin Plank’s return to the helm is aimed at streamlining operations, cutting costs, and focusing on premium product lines. One of the new product lines that Under Armour is betting on is the Echo shoe.
The Echo Shoe: A New Product Line
The Echo shoe is a high-performance running shoe that uses Under Armour’s latest technology, including a unique foam midsole and a 3D-printed upper. The shoe has received positive reviews from athletes and consumers alike, with many praising its comfort, durability, and performance. Under Armour is hoping that the Echo shoe will help it gain market share in the highly competitive footwear industry.
Restructuring and Improved Margins
In addition to new product lines, Under Armour is also focusing on restructuring and improving its margins. The company has announced plans to close 110 retail stores and cut 3% of its global workforce. These cost-cutting measures are expected to save the company around $175 million annually. Furthermore, Under Armour is raising prices on some of its products to improve margins.
Tariff Challenges and Supply Chain Risks
Despite these efforts, Under Armour still faces challenges, including ongoing revenue declines and tariff challenges. The company sources a significant portion of its products from China, and the ongoing trade war between the US and China has resulted in tariffs being imposed on imports from China. These tariffs have increased the cost of production for Under Armour, putting pressure on the company’s margins.
NFL Partnership: A Potential Market Share Gain
One potential bright spot for Under Armour is its partnership with the National Football League (NFL). Under Armour is the official outfitter of the NFL, providing uniforms, equipment, and apparel for all 32 teams. This partnership gives Under Armour significant exposure to millions of football fans and could help the company gain market share in the apparel industry.
Effect on Consumers
For consumers, Under Armour’s turnaround strategy could mean access to new and innovative products, as well as potentially lower prices due to improved operational efficiency and cost savings. However, it could also mean higher prices for some products as Under Armour focuses on premium product lines and tries to improve margins.
Effect on the World
On a larger scale, Under Armour’s turnaround strategy could have implications for the global sports apparel and footwear industry. If the company is successful in its efforts to improve margins, cut costs, and focus on premium products, it could put pressure on competitors to do the same. This could lead to a consolidation of the industry and potentially result in fewer choices for consumers.
Conclusion
Under Armour’s turnaround strategy is a complex one, with a focus on new product lines, restructuring, and improved margins. The company faces significant challenges, including ongoing revenue declines, tariff challenges, and supply chain risks. However, its partnership with the NFL and the positive reviews for new products like the Echo shoe signal potential market share gains. The outcome of Under Armour’s turnaround efforts remains to be seen, but it is clear that the company is making bold moves to position itself for long-term success.
- Under Armour is focusing on new product lines, including the Echo shoe
- The company is restructuring and cutting costs to improve margins
- Tariff challenges and supply chain risks remain significant obstacles
- Under Armour’s NFL partnership could lead to market share gains
- Consumers may see new and innovative products, as well as potentially higher prices
- Under Armour’s turnaround strategy could have implications for the global sports apparel and footwear industry
