Taking on the giants: How Under Armour founder Kevin Plank is going head-to-head with the industry's biggest players
Sunday, January 24, 2010
It is late afternoon on a Friday in September, and Kevin Plank is standing on the edge of the Auburn University football team's practice field, surrounded by top executives from Under Armour, the sports clothing and footwear company he invented.
While the players drill in near silence for the next day's game against Mississippi State, all their mental and physical energy bent toward winning, Plank watches them intently. The Under Armour chairman is in his element when he is close to football, the game he worships and the profession that defines his business.
Dressed in brown slacks and a white Under Armour shirt, Plank feverishly pounds away on his cellphone, sending text messages and photos from the practice field back to headquarters in Baltimore. He has spotted a big problem with the Auburn team's practice shorts: The UA logo is at the top by the hip, obscured by the oversized shirts the players wear untucked.
"You can NOT see any logo -- I would move it to the bottom in the future!" he types. Then: "Let's get out to see this stuff!"
Such intensity is how the 37-year-old Plank built a worldwide business with 2,700 employees and revenue approaching $1 billion. It is why he constantly flies around the world to sporting events. It's why he develops new products, finds sports celebrities to promote them and seeks a bigger audience to buy them -- from Europe to China. It's also why he pays universities such as Auburn to feature his products, the schools serving as both laboratory and showcase for Under Armour.
Plank works endlessly to give Under Armour an edge, and his deals to outfit university sports teams are a crucial part of his battle to win customers from the established big guys. Think Adidas, Reebok and Nike -- especially Nike, which outfits more than 100 colleges, compared with Under Armour's 50 or so.
"You need to put your hands around the throat of your business, and you need to run it," he told a group of Auburn students earlier that day. "There's no other way."
Plank knows he needs to create wealth for shareholders, himself included, and keep Wall Street confident that Under Armour has a future as a successful stand-alone business. If he doesn't, it could become a takeover target, pressuring Plank to sell his controlling share to a bigger rival or even a private equity firm.
"The time between $500 million and $1 billion is a weird time, a dead zone," Plank says. He refers to eyewear-maker Oakley and sports apparel firm Nautica -- both were gobbled up by bigger companies, although both brands still exist. "It's the Bermuda Triangle of apparel companies. Companies get caught. ..."
He's determined that's not going to happen to Under Armour.
As his black SUV tools through the Auburn campus, he orders the driver to pull up to Jordan-Hare Stadium, the 87,451-seat home to the Auburn Tigers and the moneymaking machine that pays for Auburn's sports program. Football is serious business here.
The car continues across the sprawling campus, and Plank starts counting out loud.