Protection Money: How “Under Armour” Built — and Broke — Its House
In the dynamic landscape of athletic apparel, few stories capture the essence of entrepreneurial spirit and market disruption quite like Under Armour. Founded in 1996 by Kevin Plank, a former University of Maryland football player, Under Armour transformed from a basement operation into a global powerhouse, ultimately reaching a peak valuation of over $20 billion in 2015. The company’s journey represents a compelling narrative of innovation, rapid growth, and subsequent challenges that would test its foundation.
Under Armour’s meteoric rise was fueled by groundbreaking product innovation, aggressive marketing strategies, and an unwavering focus on performance athletics. The company revolutionized the athletic apparel industry with its moisture-wicking technology, challenging established giants like Nike and Adidas. However, this remarkable ascent was followed by a dramatic decline, marked by strategic missteps, operational challenges, and changing market dynamics. The company’s story serves as a crucial case study in managing growth, maintaining innovation, and adapting to evolving consumer preferences in the highly competitive sportswear industry.
Company Origins and Early Growth (1996–2005)
The Under Armour story begins in the sweltering locker rooms of the University of Maryland, where Kevin Plank, a walk-on football player, grew increasingly frustrated with his cotton T-shirts that became heavy and uncomfortable during practice. This personal experience would spark an idea that would revolutionize athletic apparel. After graduating in 1996, Plank embarked on a mission to create a superior alternative to traditional cotton undershirts, investing his savings of $17,000 and using his grandmother’s basement in Georgetown as his initial headquarters.
Drawing from his football connections, Plank developed his first prototype: a compression shirt made from moisture-wicking synthetic fabric. The shirt was designed to be worn under a player’s uniform, keeping athletes dry and light throughout their performance. This initial product, which would become known as the UA #0037, represented a significant departure from traditional cotton garments and embodied Plank’s vision for performance-enhancing athletic wear.
The early days of Under Armour were marked by relentless persistence and bootstrap ingenuity. Plank traveled extensively along the East Coast, selling his revolutionary shirts from the trunk of his car. His first major breakthrough came from his former teammates who had gone on to play in the NFL. These connections proved invaluable as professional players began wearing Under Armour products, providing crucial visibility and credibility to the fledgling brand.
In 1997, Under Armour secured its first major team deal, outfitting Georgia Tech’s football program. This partnership marked a pivotal moment, demonstrating the product’s validity in a highly competitive market. The company’s reputation grew rapidly within athletic circles, particularly in football, where the moisture-wicking technology proved especially valuable. Plank’s strategy of focusing on team sports and grassroots marketing helped establish Under Armour as an authentic performance brand.
The company’s early distribution strategy was equally crucial to its success. Rather than immediately pursuing major retail chains, Under Armour focused on team dealers and specialty sporting goods stores. This approach allowed the brand to maintain its premium positioning and build strong relationships with core athletic consumers. By 1998, Under Armour had expanded its product line to include ColdGear, designed for playing in cold conditions, and AllSeasonGear, for temperature-neutral environments, demonstrating the company’s commitment to innovation and understanding of athlete needs.
The turn of the millennium brought significant growth and recognition. In 2000, Under Armour received its first big break in mainstream visibility when Oliver Stone’s “Any Given Sunday” featured the brand’s apparel. This exposure, combined with the launch of the now-famous “Protect This House” marketing campaign in 2003, catapulted Under Armour into the national spotlight. The campaign resonated deeply with athletes and consumers, establishing an emotional connection that went beyond product functionality.
During this period, Under Armour’s organizational structure evolved from a one-man operation to a sophisticated enterprise. Plank assembled a team of passionate individuals who shared his vision for revolutionizing athletic performance wear. The company culture was characterized by a competitive spirit, innovation focus, and unwavering determination to challenge the industry status quo.
Financial growth during these early years was remarkable. Revenue grew from $17,000 in 1996 to over $200 million by 2004, achieved without external investment. This organic growth was supported by strategic decisions in product development, marketing, and distribution. The company maintained tight control over its inventory and manufacturing relationships, partnering with suppliers who could meet its exacting standards for material quality and performance.
By 2005, Under Armour had established itself as more than just a maker of compression shirts. The brand had expanded into various athletic apparel categories, including training gear, baseball cleats, and accessories. This diversification, while maintaining focus on performance athletics, positioned the company for its next major milestone: going public. The successful IPO in November 2005 raised $157 million, providing capital for further expansion and marking the end of Under Armour’s startup phase.
The company’s early success was built on several key factors: a revolutionary product that solved a real problem, authentic relationships within the sports community, strategic marketing that resonated with athletes, and disciplined operational management. These elements created a strong foundation for what would become one of the most remarkable growth stories in retail history. However, maintaining this trajectory would prove to be a significant challenge as the company entered its next phase of development.
Rapid Expansion Phase (2005–2015)
The period following Under Armour’s IPO marked the beginning of an extraordinary transformation that would see the company evolve from a specialized performance apparel maker into a global athletic brand. On November 18, 2005, Under Armour’s stock debuted on the NYSE, opening at $31 per share — double its initial offering price of $13, marking one of the most successful IPOs of the year. This watershed moment provided Under Armour with not just capital, but also enhanced credibility in the competitive sportswear market.
Armed with fresh capital and public market validation, Kevin Plank and his team embarked on an ambitious expansion strategy. The company’s first major strategic move was entering the footwear market in 2006 with the launch of football cleats. This decision was carefully calculated — rather than competing head-on with Nike and Adidas in the crowded running or basketball segments, Under Armour chose to start with football, where it had already established strong brand equity. The cleats’ introduction was a resounding success, capturing $5 million in sales during their first year and establishing Under Armour as a legitimate footwear competitor.
The company’s marketing strategy during this period became increasingly sophisticated and ambitious. Under Armour moved beyond its traditional focus on football, strategically signing emerging athletes across multiple sports. The “Protect This House” campaign evolved into a broader narrative, with the introduction of “I Will” in 2013 — a powerful tagline that resonated with athletes at all levels. The company’s marketing expenditure grew significantly, but so did its impact, with campaigns featuring compelling storytelling that connected emotionally with consumers.
International expansion became a key priority during this phase. Under Armour established its first European office in 2006, followed by subsidiaries in China and other key markets. The company took a measured approach to international growth, initially focusing on establishing brand awareness through strategic partnerships with local athletes and teams. This strategy helped Under Armour maintain brand authenticity while adapting to local market preferences.
Product innovation remained at the heart of Under Armour’s growth strategy. The company invested heavily in research and development, establishing the UA Innovation Lab in Baltimore. This facility became the epicenter of product development, combining traditional athletic wear expertise with cutting-edge technology. Notable innovations included the Charged Cotton line, which brought Under Armour’s moisture-wicking technology to cotton fabrics, and the ColdGear Infrared technology, which provided superior thermal regulation.
The rapid expansion required significant changes in Under Armour’s operational infrastructure. The company invested heavily in its supply chain, establishing a global network of manufacturers and distributors. New distribution centers were built, and inventory management systems were upgraded to handle the increasing complexity of the business. Under Armour also expanded its retail presence, opening its first Brand House store in 2007, providing a controlled environment to showcase the brand’s growing product range.
As Under Armour grew, it began attracting top talent from competitors. The company’s culture evolved from its startup roots to accommodate a more structured corporate environment, though Plank worked to maintain the entrepreneurial spirit that had driven its early success. The organizational structure became more complex, with dedicated divisions for different product categories and geographical regions.
The company’s financial performance during this period was remarkable. Revenue grew from approximately $281 million in 2005 to over $1 billion by 2010, a testament to the success of its expansion strategies. Gross margins remained strong, typically above 45%, indicating the brand’s ability to maintain premium positioning despite its rapid growth. The stock price reflected this success, with the company’s market capitalization growing substantially.
The period from 2010 to 2015 marked Under Armour’s most ambitious phase of expansion, characterized by bold moves into digital technology, high-profile endorsements, and aggressive market penetration. The company’s revenue surged from $1 billion to nearly $4 billion during this period, establishing Under Armour as a legitimate challenger to the industry’s established giants.
Under Armour’s digital transformation began in earnest with a series of strategic acquisitions. In 2013, the company acquired MapMyFitness for $150 million, followed by the purchases of Endomondo and MyFitnessPal in 2015 for a combined $560 million. These acquisitions formed the foundation of Under Armour’s Connected Fitness platform, representing Plank’s vision of creating the world’s largest digital health and fitness community. The strategy aimed to gather valuable consumer data while building a deeper relationship with users through their fitness journey.
The company’s endorsement strategy reached new heights during this period. The signing of Stephen Curry in 2013 would prove transformative. Initially overlooked by Nike, Curry’s rise to NBA superstardom coincided with Under Armour’s growing presence in basketball. The Curry signature shoe line, launched in 2015, became a massive success, challenging Nike’s dominance in basketball footwear. The company also secured deals with other emerging stars, including Jordan Spieth in golf and Misty Copeland in dance, broadening its appeal beyond traditional team sports.
Retail expansion accelerated dramatically during these years. Under Armour’s Brand House concept evolved into a sophisticated retail experience, with flagship stores opening in major cities globally. The company also expanded its wholesale partnerships, securing premium placement in retailers like Dick’s Sporting Goods and Foot Locker. However, this rapid expansion would later prove problematic as the retail landscape began to shift toward digital commerce.
Innovation remained crucial, but the focus shifted toward lifestyle and fashion-forward products. The UA Sportstyle line launched in 2013, attempting to capture the growing “athleisure” market. The company invested heavily in fabric technology, introducing products like UA ColdGear Reactor and UA MicroThread. These innovations demonstrated Under Armour’s commitment to maintaining its performance credibility while appealing to a broader consumer base.
International growth accelerated significantly during this period. The company established regional headquarters in key markets, adapting its product offerings and marketing strategies to local preferences. China became a particular focus, with Under Armour opening hundreds of stores and building strong e-commerce partnerships. Latin America and Europe also saw significant expansion, though profitability in these markets proved challenging.
Behind the scenes, Under Armour’s operational infrastructure struggled to keep pace with its rapid growth. The company invested heavily in inventory management systems and distribution capabilities, but inefficiencies began to emerge. The complex mix of owned manufacturing, contracted facilities, and licensing agreements created supply chain challenges that would later impact performance.
By 2015, Under Armour appeared unstoppable. The stock price reached an all-time high, valuing the company at over $20 billion. Revenue growth consistently exceeded 20% annually, and international expansion showed promising results. The Connected Fitness platform boasted over 150 million users, seemingly positioning Under Armour at the intersection of fitness and technology.
However, beneath this remarkable success, warning signs were emerging. The company’s aggressive expansion had stretched its operational capabilities and financial resources. The heavy investment in digital technology and retail expansion impacted margins, while inventory levels grew faster than sales. The push into lifestyle products risked diluting the brand’s performance heritage, and competition in the athleisure market intensified.
Moreover, Under Armour’s dependence on the North American market and wholesale channels made it vulnerable to changing retail dynamics. The rise of e-commerce and direct-to-consumer models would soon challenge traditional distribution strategies. While the company had achieved remarkable growth, maintaining this momentum would prove increasingly difficult as market conditions evolved and competitive pressures intensified.
Decline Phase (2017–2024)
The unraveling of Under Armour’s success story began in 2017, marking a dramatic reversal from its meteoric rise. What started as concerning quarterly results soon cascaded into a full-blown crisis that would fundamentally challenge the company’s strategy, culture, and future direction. At the heart of this decline was a series of strategic missteps, with perhaps none more emblematic than the company’s massive bet on digital fitness.
Kevin Plank’s vision of transforming Under Armour into a technology company had led to ambitious investments in digital fitness platforms. The company had spent nearly $750 million acquiring MapMyFitness, MyFitnessPal, and Endomondo between 2013 and 2015. Plank believed these platforms would provide invaluable consumer data, creating a “connected fitness” ecosystem that would revolutionize the athletic apparel industry. The theory was compelling: understand users’ workout habits, sleep patterns, and nutritional preferences to better serve their needs and predict future trends.
However, the reality proved far more challenging. Despite amassing over 200 million registered users across these platforms, Under Armour struggled to monetize this vast digital community or translate the data into actionable business insights. The company found itself sitting on mountains of user data without a clear strategy for leveraging it to drive apparel and footwear sales. The disconnect between digital engagement and core product sales became increasingly apparent, with the fitness apps operating essentially as standalone entities rather than integral parts of the Under Armour ecosystem.
The financial drain from maintaining and developing these digital platforms coincided with broader market challenges. In early 2017, Under Armour reported its first quarterly loss as a public company, breaking a remarkable streak of 26 consecutive quarters of 20% or greater revenue growth. The stock price, which had already been declining from its 2015 peak, plunged further as investors questioned the company’s strategy and execution.
Adding to these challenges was the bankruptcy of key retail partner Sports Authority in 2016, which sent shockwaves through Under Armour’s distribution network. The closure of over 450 Sports Authority stores not only resulted in lost sales but also flooded the market with discounted Under Armour merchandise, damaging the brand’s premium positioning. This situation forced the company to increase its presence in discount channels to move excess inventory, further eroding its brand equity.
Operational inefficiencies began to surface as the company’s rapid expansion came back to haunt it. Years of aggressive growth had left Under Armour with a bloated inventory, inefficient supply chain, and complex organizational structure. The company had built its infrastructure for continued explosive growth, but as sales slowed, these fixed costs became an increasing burden.
Despite mounting evidence of strategic miscalculations, Plank initially remained committed to the digital transformation strategy. The company continued to invest heavily in technology and innovation, even as core apparel sales showed signs of weakness. This persistence reflected a deeper challenge within Under Armour’s culture: an unwavering belief in its ability to innovate its way out of problems, even when market signals suggested a need for fundamental course correction.
By late 2017, the company initiated a restructuring plan, but the measures proved insufficient to address the depth of its challenges. Employee morale suffered as layoffs began, and questions arose about the company’s workplace culture. Reports emerged about corporate spending practices, including the use of company resources for personal projects and entertainment, adding to stakeholder concerns about governance and oversight.
The initial phase of Under Armour’s decline revealed how quickly strengths could become weaknesses in the fast-moving athletic apparel market. The company’s ambitious digital strategy, once seen as visionary, had become a costly distraction. Its premium positioning, previously a key differentiator, was eroding in the face of market pressures and inventory challenges. The story was shifting from one of innovative disruption to cautionary tale about the risks of overexpansion and strategic overreach.
The deepening challenges at Under Armour were further complicated by the company’s struggle to establish itself as a credible footwear brand beyond its initial success with football cleats. While the Stephen Curry basketball shoe line had shown early promise, with the Curry 1 and Curry 2 generating significant buzz, subsequent releases failed to maintain momentum. The Curry 3, launched in 2016, significantly underperformed expectations, forcing price cuts that hurt both revenues and brand perception. This pattern of inconsistent product success became emblematic of Under Armour’s broader footwear challenges.
The company’s struggles in footwear stemmed from multiple factors. Unlike Nike and Adidas, who had decades of experience in sneaker design and cultural relevance, Under Armour’s aesthetic often missed the mark with consumers. Products like the Curry 8 and Project Rock lines, while technically innovative, failed to capture the lifestyle appeal that drives modern sneaker culture. The company’s performance-first mindset, once a strength, had become a limitation in a market increasingly driven by style and cultural cachet.
By 2019, Under Armour’s product design issues extended beyond footwear. The company’s attempt to enter the lifestyle and athleisure market had produced largely uninspiring results. While competitors successfully blended performance features with contemporary style, Under Armour’s offerings often appeared functional but aesthetically dated. The brand’s rigid focus on performance athletics meant it missed the broader shift toward casual, style-conscious athleticwear that could transition from gym to street.
The COVID-19 pandemic in 2020 exposed and accelerated Under Armour’s existing weaknesses. While the athletic apparel industry generally benefited from the rise in home workouts and casual wear, Under Armour struggled to capitalize on these trends. The company’s heavy reliance on wholesale channels proved particularly problematic as retail locations closed. Meanwhile, its digital infrastructure, despite years of investment, wasn’t properly positioned to capture the surge in online shopping.
In November 2019, Kevin Plank stepped down as CEO, handing the reins to Patrik Frisk, though remaining as executive chairman and brand chief. This leadership transition marked a crucial moment, with Frisk inheriting a company in need of fundamental transformation. The new CEO initiated a more aggressive restructuring plan, including the painful decision to sell MyFitnessPal for $345 million in 2020 — less than half the purchase price five years earlier.
The company’s attempts at recovery faced additional hurdles. A SEC investigation into accounting practices between 2015 and 2017 resulted in a $9 million settlement in 2021. Brand partnerships suffered, with several high-profile college programs, including UCLA and Cal, terminating their contracts. These developments further damaged Under Armour’s reputation and market position.
Supply chain disruptions during the pandemic period exposed the inefficiencies in Under Armour’s operations. The company struggled with inventory management, often having too much of what wasn’t selling and too little of what was in demand. This mismatch led to increased markdowns and margin pressure, further straining financial performance.
By 2022–2023, Under Armour’s efforts to stabilize the business showed mixed results. The company streamlined its product offerings, reduced reliance on off-price channels, and attempted to strengthen its direct-to-consumer business. However, the brand continued to struggle with identity and relevance. While its performance gear maintained a loyal following among serious athletes, it had largely lost its appeal to the broader consumer base that drives growth in the athletic wear market.
As of 2025, Under Armour faces the challenge of reinventing itself while maintaining its performance heritage. The company’s future success will likely depend on its ability to balance technical innovation with style, streamline operations while maintaining quality, and rebuild brand equity in an increasingly crowded market. T
Strategic Analysis
The story of Under Armour’s strategic challenges represents a complex interplay of external market forces and internal decisions that created a perfect storm for the once-unstoppable brand. In the highly competitive landscape of athletic apparel, where consumer preferences shift rapidly and brand perception can make or break a company, Under Armour found itself increasingly out of step with the market it had once disrupted.
The external environment had shifted dramatically from the company’s early days. The athleisure revolution, pioneered by Lululemon and quickly adopted by traditional players like Nike and Adidas, fundamentally changed consumer expectations. While Under Armour remained fixated on performance gear and traditional sports, consumers were increasingly seeking versatile apparel that could transition seamlessly from workout to workplace to social settings. This misread of market evolution proved costly, as the company’s performance-first mindset became increasingly disconnected from broader consumer preferences.
The competitive landscape also intensified in ways that exposed Under Armour’s vulnerabilities. Nike and Adidas successfully leveraged their heritage and cultural capital to maintain leadership in premium segments while effectively expanding into new categories. Meanwhile, new entrants like Lululemon captured the high-end athleisure market, and value-oriented brands like Fabletics and private labels provided strong alternatives at lower price points. Under Armour found itself caught in an uncomfortable middle ground — not quite premium enough to command luxury prices, yet too expensive to compete on value.
Internally, Under Armour’s organizational structure and culture contributed significantly to its challenges. The company’s early success had bred a certain hubris, with decision-making increasingly concentrated among a small group of longtime executives who shared similar perspectives. This echo chamber effect made it difficult for the organization to recognize and respond to changing market dynamics. The company’s Baltimore headquarters, once a symbol of its outsider status and entrepreneurial spirit, had become somewhat isolated from the fashion and cultural trends driving the industry.
Distribution strategy emerged as another critical weakness. Under Armour’s heavy reliance on traditional sporting goods retailers and department stores proved problematic as consumer shopping habits shifted online and to specialty retailers. The company’s late and somewhat half-hearted embrace of direct-to-consumer channels left it playing catch-up in the digital retail revolution. While competitors built sophisticated omnichannel experiences, Under Armour’s digital presence remained fragmented and underinvested, despite its massive spending on fitness apps.
The company’s innovation strategy, once a source of strength, became increasingly misaligned with market needs. While Under Armour continued to invest heavily in performance technology, competitors were innovating in areas like sustainability, customization, and digital integration. The company’s R&D efforts, though substantial, often resulted in solutions in search of problems rather than addressing evolving consumer desires.
Financial management presented another dimension of strategic missteps. The company’s aggressive growth strategy had led to significant investments in inventory, retail expansion, and digital acquisitions, funded largely through debt. As growth slowed, this financial leverage became a burden, limiting the company’s flexibility to invest in necessary transformations. The focus on maintaining high growth rates led to decisions that prioritized short-term sales over long-term brand equity, including increased reliance on discounting and off-price channels.
Strategic Analysis: The Unraveling of Brand and Operations
At the heart of Under Armour’s strategic challenges lay a fundamental crisis of brand identity. The company that had built its reputation on being the innovative outsider found itself struggling to maintain relevance in a market it helped create. The brand positioning, which had once powerfully resonated with serious athletes, began to feel one-dimensional in a market increasingly driven by lifestyle and cultural influences.
The company’s marketing approach, while still commanding significant budgets, lost its earlier clarity and impact. The “I Will” campaign, though emotionally resonant, failed to evolve with changing consumer aspirations. Under Armour’s continued focus on traditional sports marketing through team sponsorships and athlete endorsements appeared increasingly out of touch as competitors successfully tapped into broader cultural movements and social conversations. The brand’s masculine, performance-focused image became a liability as the market shifted toward inclusivity and lifestyle orientation.
Operational execution presented equally significant challenges. Under Armour’s supply chain, built for rapid growth, proved inflexible when market conditions changed. The company’s inventory management became a persistent problem, with seasonal products often arriving too late or in wrong quantities. This led to a vicious cycle of discounting that eroded both margins and brand perception. The company’s attempts to maintain premium positioning were consistently undermined by the presence of its products in discount channels, creating a disconnect between brand aspiration and market reality.
Product development and design processes revealed deeper organizational issues. While Under Armour maintained its technical expertise, it struggled to translate performance innovations into products that resonated with changing consumer tastes. The design team, heavily weighted toward technical performance, lacked the fashion and lifestyle sensibility that had become crucial in the athletic wear market. Collections often appeared disjointed, lacking the cohesive storytelling that competitors masterfully executed.
The company’s international expansion, while ambitious, suffered from a lack of cultural adaptation. Under Armour attempted to replicate its American playbook in diverse markets without sufficiently understanding local preferences and consumption patterns. This one-size-fits-all approach proved particularly problematic in fashion-conscious European markets and the rapidly evolving Asian marketplace, where competitors were creating market-specific products and marketing strategies.
Leadership dynamics also played a crucial role in the strategic drift. The transition from founder-led growth to professional management proved challenging, with different visions for the company’s future creating internal tensions. The corporate culture, once a source of strength, became a barrier to change as the organization struggled to attract and retain talent with the diverse skill sets needed for its evolution.
Perhaps most tellingly, Under Armour’s response to these challenges often focused on symptoms rather than underlying causes. Cost-cutting initiatives and restructuring efforts, while necessary, failed to address fundamental questions about the brand’s role in consumers’ lives. The company’s attempts to pivot toward lifestyle products felt reactive rather than visionary, lacking the authenticity that had characterized its early innovations.
By 2025, the cumulative impact of these strategic missteps had transformed Under Armour from an industry disruptor to a cautionary tale of how quickly competitive advantages can erode in the modern retail landscape. The company’s journey revealed how success itself can become a vulnerability when it breeds complacency and resistance to change. For industry observers and business students, Under Armour’s story provides rich insights into the challenges of maintaining innovation, managing growth, and evolving with consumer preferences in the dynamic world of consumer brands.