Editor's Note: This is a complimentary research excerpt from Hedgeye Retail Sector Head Brian McGough. For more information on our services click here.
- "Under Armour Inc...bolstered its running team by naming industry vet Fritz Taylor as VP of running...Taylor, who was most recently VP and GM of running at Norcross, Ga.-based Mizuno, also has worked for Seattle-based Brooks and Beaverton, Ore.-based Nike Inc."
Q: What’s your take on Under Armour’s position in the running market?
FT: "...Everyone here would admit that Under Armour has had some fits and starts — hit and misses, if you will — particularly on the footwear side. But the Speedform Apollo just launched, and it’s getting some really strong sell-through numbers, and it’s a shoe that people are saying [is] something unique that no one else can do. We’ve got a nice foot in the door that we can leverage for bigger things."
Q: Is the consumer open to new brands and ideas in running?
FT: "...minimal, even though it has waned, brought some energy and excitement around new concepts. Now the big thing is maximal, but a bigger thing is that runners are more switched on to new, innovative ideas and stories that can help improve their running experience."
Q: Is it different working at an apparel company that makes footwear than at a footwear company that makes apparel?
FT: "You can absolutely tell [the difference]. One thing I was just dealing with is that here we have to wait for apparel to set the colors [for the season], and at every other company I’ve worked for, the footwear team operated that. That immediately slapped me in the face this week: 'Oh, wait, I need to wait for apparel.'”
Takeaway from Hedgeye’s Brian McGough:
That last answer above from Fritz Taylor 'footwear needs to wait for apparel' is logical for a company like Under Armour. But the reality is that it is probably the wrong answer. The best companies (think Nike) run apparel and footwear product creation in tandem. Chronic underperformers (think Adidas) run their business in a series circuit (first apparel, then footwear in Adidas’ case). Again, that's probably okay for Under Armour where footwear is still in its infancy. But this process will need to evolve if UA wants to be considered a real footwear company. We will be watching.