When Under Armour founder and then-CEO Kevin Plank announced in 2019 that he would be stepping down, Patrik Frisk was viewed as a natural successor. Having joined the brand in 2017, Frisk had experience as chief operating officer and already was making an impact on Under Armour’s back-end operations.

“While we certainly don’t want to downplay Mr. Plank’s success and achievements in guiding the company to a $5+ billion global brand, we do believe that in order to take the company to the proverbial ‘next level’, they could use some new blood in the CEO seat,” a team of Wells Fargo analysts wrote at the time, calling Frisk a “more-than-capable successor” based on his improvements to inventory management and other operational elements of the business.

It was a surprise, then, when Frisk exited after just two years helming the athletics giant.

“I think it’s very clear that they groomed him for the role,” Tom Nikic, senior analyst of apparel and footwear at Wedbush, said of Frisk, adding that he became a very visible member of the company when he joined in 2017. “I think what the recent change signals is a change in philosophy as to the way the company should be run between Patrik and Kevin. And, put more simply, the level of growth that the company should be achieving.” 

In an emailed note when Frisk first stepped down, Nikic pointed to the executive’s separation agreement as evidence that the departure wasn’t mutual. Under Armour agreed to pay Frisk double his annual salary, amounting to a lump sum of almost $7 million, along with $238,000 for relocation costs, and an additional $1.3 million in “consulting fees” through September 2023.

The company itself gave no specific reason for Frisk’s departure, though Plank said in a statement at the time that Frisk made “significant strides in advancing enterprise-wide operational excellence, and Patrik’s steadfast leadership has been crucial to strengthening our foundation and positioning the company for our next growth phase.” The company declined to comment further on Frisk’s departure and what Under Armour is looking for in a new chief executive.

Frisk completed a list of organizational tasks at Under Armour, saying in November last year that the brand’s “transformational work” was largely done. He decreased Under Armour’s reliance on off-price, helped the retailer exit wholesale doors and bolster its DTC channels, and lowered promotions. But while that work was needed, Frisk’s focus on more sustainable, slower growth may not have matched with Plank’s vision for the brand.

“There are very few examples of an aggressive growth-minded leader being replaced by an executional expert,” Greg Portell, lead partner in the global consumer practice at Kearney, said. “Apple might be the only one that comes to mind where Jobs was out there and Cook, who by all means is a tactician, has done so well.”

A return to ‘get big fast’ mentality

2021 was a notable year for Under Armour. It was the year Lululemon’s revenue overtook Under Armour’s. The athleisure brand brought in $6.3 billion to Under Armour’s $5.7 billion, amounting to 42% growth, with plans to double that amount by 2026. Under Armour’s sales growth, by contrast, was in the mid-20% range.

For the year ahead, Under Armour in May projected revenue growth of 5% to 7%, while Lululemon is anticipating growth between 24% and 26%. For two companies of roughly the same size in the same category, that’s a marked difference. And when Plank was CEO, the rate of growth at Under Armour was a bragging point, according to Nikic.

Under Armour’s projected sales growth this year is also slower than its competitor.

Cara Salpini/Retail Dive ; Data: Lululemon and Under Armour press releases

 

“The slogan of the company was ‘get big fast’ and they would go on earnings calls and tout the streak of 20%-plus revenue growth quarters that they had,” Nikic said. “Generating growth was extremely important to Kevin and I think he probably looks around and he sees really strong growth from Lululemon… Puma and Nike and Adidas.” 

Under Armour’s expectations, on the other hand, are “not the level of growth that most other athletic wear brands were seeing, and that probably did not sit well with Kevin.” Under Armour declined to comment when asked by Retail Dive if Frisk’s departure was tied to revenue growth.

Whoever takes on the role next, strong growth is “pretty much a minimum requirement,” Nikic said. But how does Under Armour return to a more robust level of growth?



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