1 Sep 2015
The founder and CEO of Under Armour chose to open his annual shareholders meeting by addressing the unrest that gripped Baltimore, the city where his company is headquartered, in April this year.
“Like many, [we are] deeply saddened by the events in our hometown, and our thoughts and prayers go out to Freddie Gray’s family”, Plank said. “But we are one Baltimore and we will work towards positive change with local leaders and groups, on and off the sports field, in the neighbourhoods that drive change throughout the city in any way that we can. The people of Baltimore are resilient and we’re going to be better because of all of this.”
The sentiments he shared about the protests gave an insight into the man behind the Under Armour brand. First and foremost, he has a deep sense of pride in being a lifelong resident of Maryland. After all, he and his five older brothers grew up in the small town of Kensington, just an hour’s drive away from the city that has been the focus of news headlines all around the world, which explains the affinity he has for those affected by the recent turbulence.
Kevin Plank CV
MBA, University of Maryland
1996: While still studying at the University of Maryland, Plank came up with the idea for a moisture-wicking shirt, which offered muscular support to improve performance
1997: Having cleverly leveraged his contacts within the NFL, the Under Armour brand began to be noticed and, one year after launching, Plank had $100,000 of orders to fill
1999: The brand received a boost when Warner Bros asked Under Armour to provide outfits for two upcoming films. Plank capitalised on this with a sharp ad campaign
2000: In recognition of Plank’s rapid growth of the brand, Under Armour was chosen as the official outfitter for the short-lived, but much-advertised XFL football competition
Plank’s decision to put the unrest at the top of his agenda that day also stands as testament to the position he holds in the local community, not just as a business leader, but as a man committed to giving back to the place he and his company call home.
This commitment is not just expressed in times of crisis, however, but year-on-year through Under Armour’s Give Back initiative and his personal work with local organisations. Plank is also a firm advocate of entrepreneurism, and believes it is one of the things that helped make America great. Not one to shy away from putting his money where his mouth is, he is an active supporter of the University of Maryland’s Robert H Smith School of Business and Dingham Center for Entrepreneurship, and he sponsors other enterprises aimed at helping young people turn their dreams into business opportunities.
These philanthropic ventures are just some of the ways that Under Armour’s boss chooses to share the fruits of his labour with the state he holds so dear. Driven by his passion for sports and an ambition to keep the tradition and legacy of thoroughbred horseracing in Maryland alive, Plank purchased the historic Sagamore Farm (a horse breeding farm) in 2007.
All this philanthropic spending quickly adds up. Those charitable organisations and initiatives that receive Under Armour’s financial support will be pleased to know that the company rose to a new high at the end of last year, with little sign of slowing. In fact, Under Armour recently became the second-largest player in the US sporting apparel market in terms of sales, helping the company to secure a record-breaking $3bn in revenue in 2014. Pretty impressive for a company that was built on the back of a simple idea that grew out of a childhood passion.
As a kid, Plank had an insatiable appetite for sports, and a particular talent for American football. Sadly, college recruiters still passed over him, even at his beloved University of Maryland. Undeterred and determined to walk out on the field wearing a Maryland Terrapins jersey, Plank made the coaches notice him by becoming a hard-hitting member of the special team, eventually becoming captain.
Football practice in the hot summer sun meant that he and his teammates had to constantly change out of their sweat-laden cotton t-shirts. This caused Plank to get his thinking cap on in search for a solution to the problem. What he came up with was a lightweight shirt, made from fabrics used in women’s undergarments. Plank then took the prototype on the road, visiting locker rooms up and down the country, introducing athletes and equipment managers to the future of performance sportswear – a tight-fitting, moisture-wicking t-shirt that supports players’ muscles and helps regulate their body temperature.
What began as a novel idea, launched in Plank’s grandmother’s basement, grew to become a multi-billion dollar brand, selling everything from performance footwear to apparel and accessories worldwide.
Under Armour’s success is the result of many factors, but the one its founder champions over all others is blind determination. “I have a saying we use at Under Armour”, explained Plank in a speech at the University of Maryland. “We were always smart enough, to be naïve enough, to not know what we could accomplish.” The motto may embody the ethos of the company for its owner, but to put its success down to willpower alone undersells the ingenuity of Plank’s business strategy.
While the initial capital to launch the company came from the man himself, in order to help the brand reach its full potential the company went public, raising $115m in the process and allowing the business to expand into new markets. But Plank’s stewardship of the company has been particularly crucial to its success, which is why it was essential that, when the company was floated on the NYSE, he maintained his majority shareholding of over 36 million shares, worth more than $2.75bn. With Plank firmly at the helm, Under Armour was positioned to reap the rewards that come from having a former athlete as the CEO of a sports brand.
In an article for Harvard Business Review, Plank explained how creating an innovative product is one thing, but selling it is another story entirely. “This is a piece of the Under Armour story that most people don’t appreciate”, he claimed. “They focus on the innovative product. But I wasn’t just a guy who created a new kind of athletic wear. I had friends inside the locker rooms of more than a dozen professional football teams. Although Under Armour has become a $1bn brand by selling to consumers, I created it as a product for elite athletes. And when I was laying plans for the business, my contacts among these NFL players were a vital part of my strategy.”
Eric Ogbogu was one such contact. He and Plank first met on the college football field, playing alongside each other for the Maryland Terrapins. After college, Ogbogu went on to get picked in the NFL draft by the New York Jets, and would later play for the Cincinnati Bengals and the Dallas Cowboys. Having the likes of Ogbogu on speed dial gave Plank the opportunity to execute a business strategy that would help put Under Armour on the map and provide the capability to compete with the big boys – Adidas and Nike – without requiring a large amount of capital to do so. As an example, when Under Armour needed someone for a TV spot, Ogbogu stepped up and the Protect This House ad campaign, which became synonymous with the brand, was born.
Under Armour in numbers:
“One thing people don’t realise about endorsements is how few athletes are instantly recognisable, and how effective an endorsement can be from someone who’s relatively unknown but has the right personality. Out of 800 players in the NFL, there are only about 10 that most people would recognise with their helmets off, and Eric wasn’t one of them”, Plank noted. “Nonetheless, we put him in an Under Armour ad screaming ‘we must protect this house!’ – the catchphrase became really well known, and Eric became famous as the Under Armour guy. The point is that you don’t need to have Tiger Woods in a commercial for it to be effective.”
Under Armour feels authentic because it is. It’s a brand built by a former athlete, selling a product designed for actual athletes. It’s a winning formula, and one that has been reinforced by endorsements from sporting stars like Tom Brady, but more importantly by less universally known ones too.
“A successful endorsement should facilitate a conversation between the brand and the athlete, and between the athlete and the consumer”, said Plank. He has certainly achieved that. Endorsements with big name stars can sometimes lack substance, but with Under Armour it’s about more than that. Athletes wanted the product because it helped them perform to the best of their capabilities, and if high-level athletes want your product, consumers will want it too.
Challenging the throne
Key to the company’s continued success is maintaining this authenticity as it expands into new markets. Many companies fail to preserve their brand as the business begins to scale up. But, so far at least, Plank and his team have managed to add new lines of clothing and diversify their product offering without sacrificing the integrity of the Under Armour brand.
Marketing expert and brand strategy specialist David Aaker believes that the company’s expansion into women’s clothing is an example of how Under Armour has grown while staying true to the brand. “These women’s products are led by meaningful innovations, guided by female designers and athletes”, he noted. “For example, the Speedform line is inspired by bra design and is actually manufactured in a bra factory. The brand-building also reflects the brand in the women’s arena. Ads featuring ballerina Misty Copeland, who was once told that she didn’t have a ballerina body, and soccer star Heather Mitts doing her morning workout are good examples.”
Plank has always said that his main objective with Under Armour is to make all athletes better through passion, design, and the relentless pursuit of innovation. In college, he set out to help football players – many of whom were his friends – perform better. As the brand has grown, that ambition to improve performance has expanded to encompass not just professional sportsmen and women, but people at every level.
In the battle of the brands, maintaining a consistent message is key. Nike has built an empire under the slogan ‘Just do it’, while Under Armour is in the process of cultivating its own under the tagline ‘I Will’. Nike has held the top spot for some time now. But, should Plank manage to keep his company and, more importantly, his brand on course, then it is likely that Under Armour will grow to become the premier brand worn by fitness fanatics the world over.