(2 of 3)
But that's not its only challenge. Like most successful upstarts, Under Armour faces growing competition from big established brands. Nike has launched a line of sweat-wicking clothing called Dri-FIT One. And Reebok is selling a similar line, called NFL Equipment, as part of a 10-year, $250 million licensing deal with the National Football League. Meanwhile, Under Armour's image of insider cool will be strained as it tries to expand its market beyond committed sports enthusiasts. "It's been able to captivate the hard-core male athlete," says Marshal Cohen, co-president of market-research firm NPDFashionworld. "If there's a brand those athletes feel really helps them, boy, will they be loyal to that brand. But the broader you grow your business, the less of a fanatic the customer is. The casual user shifts from brand to brand."
Headquartered in renovated offices on the rundown waterfront of Baltimore, Md., Under Armour is privately held by Plank, 30, his mother, five brothers and two partners. Under Armour manufactures about half its gear in Honduras, Mexico and other countries in the Caribbean basin. Wages are higher in Baltimore, but the company makes about half its goods there and in other U.S. cities to ensure rapid turnaround for key products. Under Armour ships 175,000 items a week, mostly shirts selling for $25 to $50 but also shorts, socks and headgear. All are made of various blends of polyester and Lycra. Most of the clothing is formfitting, but a new line called Loose Gear was added a few years ago for customers who aren't gym sculpted. (Nike's Dri-Fit line is a major competitor in this market segment.) New products in 2003 will include golf shirts, boxer shorts, briefs and women's team wear.
Under Armour's buyers include 101 major college-football teams, players from 28 NFL teams, Major League Baseball, the National Hockey League, Major League Soccer, the U.S. ski team, college and pro lacrosse teams and countless youth teams. Under Armour has no military contracts, but a Navy SEAL reports that he and his comrades "pool our money and buy it out of our own pockets."
Under Armour's passionate following, achieved largely by word-of-mouth marketing, is the envy of the industry. "It's not so much marketing pizazz as the performance of the product" that accounts for its success, says Mike May, a spokesman for the Sporting Goods Manufacturers Association International. Under Armour "was one of the most requested apparel items for Christmas gifts for all genders and ages," says Kevin O'Dell, assistant manager of Galyan's sporting goods in Gaithersburg, Md. "When Nike came out, it was all about the swoosh. Now it's Under Armour. If you watch any interview in a locker room, they're wearing Under Armour."