Under Armour Launches New Footwear Line
By Tim Richardson
Under Armour CEO Kevin Plank joined NFL quarterback Tom Brady, Olympic gold medal skier Lindsey Vonn and NBA guard Kemba Walker in New York June 20 to unveil the brand's new UA Spine RPM footwear collection. Each high-profile athlete is an Under Armour endorser.
The shoe line will be available beginning June 29. The men's and women's line will have a suggested retail price of $99.99, while the grade-school product will be $79.99.
According to a release, the UA Spine RPM is comprised of a responsive inner core; revolutionary UA Micro G® foam inside for flexibility and support; and an ultra-lightweight UA Spine Cage on the sole of the shoe that keeps the foot locked in place.
"This is a transformative moment for the Brand and for the performance footwear landscape as UA Spine is bringing athletes a technology system specifically designed to allow them to run with a purpose and push the boundaries of training like never before," Plank said in a statement. "The innovation and technology in this collection of footwear underscores Under Armour's commitment to making all athletes better."
Plank said the line of shoes would initially begin with the running category, but expand into individual sports such as baseball, basketball and football in the near future.
Under Armour's shares have climbed 41 percent since the beginning of 2012, significantly outperforming one of its top competitors, Nike. But Andrew Schrage of MoneyCrashers.com said that even though the release of the new footwear collection would help UA, the company still has a long way to go in the running market.
"Even with 15 percent growth in May, the company still only occupies 1.6 percent of the market," Schrage said. "In contrast, Nike stands at almost 51 percent. And although the [Under Armour] shoe is in fact light at 9.7 ounces, it's nowhere close to Nike's lightest offering, the Flyknit Racer [5.6 ounces], which is set for release in July."
Nike's Flynit Racer will be 19 percent lighter than the company's Zoom Streak 3, which was worn by the first-, second- and third-place finishers in the men's marathon at the 2011 World Championships.
Schrage said price point could be a factor that tips the scale in Under Armour's favor.
"The budget-minded may opt for the Spine, with a base price of $99.99, since Nike's shoe is expected to run in the $150 range," Schrage said. "Future plans call for the Spine brand to be extended into shoes for specific sports. … That may improve their market share as well."
According to Under Armour, the UA Spine RPM's most distinguishing visual element is the "technology-loaded and seamlessly constructed UA Spine Cage, which features a cored-out chassis and the removal of all unnecessary material." The company attributes these elements for enabling the shoe to be one of the lightest, most flexible available.
"Running is a critical component of any true athlete's training, and you're always looking for a shoe that is lightweight, flexible and has the support you need to perform your best," said Brady, a two-time NFL MVP and three-time Super Bowl winner.
To promote the launch of the UA Spine collection, Under Armour will debut its "This is How We Run" marketing campaign in July. The multi-faceted campaign will include a 30-second broadcast spot and an extended 60-second online version, digital media, in-store and billboard inventory, as well as support on various social media channels. The campaign will feature Brady and Walker, along with reigning NFL Rookie of the Year Cam Newton and Atlanta Falcons wide receiver Julio Jones.
According to Forbes, Under Armour's revenues in 1996, the year Plank founded the company, were $17,000. In 2011, Under Armour revenues totaled $1.5 billion. Investors value Nike at roughly $50 billion. Nike, created in 1972, has the advantage of being in the market longer.
Outside of the age difference, a major separation point between the two companies involves the geographical breakdown of their revenue streams. Analysts say that Under Armour's popularity is mainly in the United States, while Nike is a well-recognized global brand. Currently, more than 90 percent of UA's net revenue derives from North America, while two-thirds of Nike's net revenue comes from the international market.
Following the UA Spine launch, Plank appeared on CNBC June 20. He said Under Armour knows who it is and he was confident the company would continue to grow during the coming years. Plank also said he thought that footwear would eventually be a larger seller than apparel for the company.
(Photos courtesy of Under Armour)
Posted June 25, 2012