Branding the World of Sports

Posts Tagged ‘tennis shoes’

Under Armour too aggressive in footwear?

Posted by ZA on November 3, 2009

Under Armour has been a favorite brand in the sports world for over a decade.  The Under Armour story has been a case study in success; a tiny company that makes good competing against the giants in their space (i.e.- Nike & Adidas).  They’ve grown up a lot from those early days in founder Kevin Plank’s basement; Under Armour is now a publicly traded company (NYSE: UA) with almost a billion dollars in revenue.

One of the characteristics that has made Under Armour successful is their aggressive attitude towards growth.  They quickly diversified from an innovative apparel company into many other facets of the sportswear industry, including athletic footwear.  With each new expansion of their business they seemed to thumb their nose at the established players in that space and set their sights on domination.  Under Armour’s bravado was never more obvious then when they used the tagline “The future is ours” during their 2008 Super Bowl spot.  But these days Under Armour is discovering that being one of the biggest brands in their space, a successful publicly traded company, has some downside.

Under Armour expansion into footwear has not gone as smoothly as planned, which has caused analysts and investors to loudly criticize UA’s moves thereby pummeling their stock price.  This AdAge article says that analysts have characterized Under Armour’s moves as “weak”; particularly the decision by the company to pull back on how aggressively they plan to expand their shoe line.    The negative attention has caused Under Armour’s stock price to drop dramatically to $26 per share from its previous 52-week high of $33 per share (Source: Yahoo Finance).  It also means that Under Armour has some tough sledding ahead if it wants to continue to live up to its aggressive brand image.

Their are still big opportunities available to Under Armour in the athletic footwear category, but they might need to be a little more conservative.  Perhaps they should follow the advice one expert said and grow things a little slower.  Try to develop their niche in the shoe market organically, rather than forcing their way with a big media blitz (i.e.- Super Bowl commercial).  There is a lot of established competition in shoes and Under Armour isn’t entering the space with anything revolutionary like they did in sports apparel with their moisture wicking shirts.  If I was Under Armour I would try to focus on a certain niche in shoes, like: football cleats, workout shoes or casual shoes.  Once successful in that space, then I would grow their product line into the more competitive categories like running shoes.  Sometimes bigger isn’t better, even for big brands like Under Armour.


Under Armour

Posted in Adidas, Apparel & Shoes, Nike, Sports Brands, Under Armour | Tagged: , , , , , | 3 Comments »

What is the top selling category of sporting goods?

Posted by ZA on March 14, 2009

Consumers in the United States spend close to $20 million dollars every day on sporting goods & athletic apparel.  The Sporting Goods Manufacturers Association (SGMA) estimates the total U.S. sales at close to $70 billion dollars per year.  That figure encompasses a wide range of sports from bowling to racquetball, some of which are growing (basketball, ice hockey) and some of which are declining in the current economy (golf, tennis).  But the real question is which categories of sporting goods are the top sellers?  Which are the largest revenue producers?

Top selling sporting goods by sport (2008 revenue):
1. Golf – $2.76 billion
2. Athletic shoes – $1.24 billion
3. Baseball/softball – $602 million
4. Football – $496 million
5. Basketball – $356 million
6. Soccer – $304 million
7. Tennis – $256 million
8. Ice Hockey – $218 million
Source: SGMA

No surprise that golf is the top of the list because golf equipment is expensive.  I bought a new driver and fairway wood last year and it cost me close to $600 for the pair.  Tennis shoes (I’m referring to any athletic shoes) are a clear #2 in sports, although they did experience a 5% decline in revenue between 2007 and 2008.  The next four are all sports that U.S. kids typically play growing up, so it’s not surprising to see that kind of money being spent on those sporting goods.  A guy told me yesterday that every sport his kids play costs him $100, every single year they play.  While obviously not scientific, the point is that parent’s are laying out a lot of cash to put their kids in the latest baseball, football, basketball and soccer gear.

Sports are a big part of culture, so I don’t expect any decline in spending for sporting goods to last long beyond the current recession.  People need sports, so they will continue to spend aggressively on the necessary equipment.

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