Under Armour brings back COO post amid leadership shake-up
· Under Armour on Tuesday announced, amid other executive changes, the hire of Patrik Frisk as president and chief operating officer, effective July 10, according to a company press release. The move restores the executive position at the retailer, which had divided those duties up among the CFO and other executives after the CFO/COO Brad Dickerson announced his departure in 2015, effective last year.
· Frisk has three decades of experience in apparel and footwear. Most recently he was CEO of footwear retailer The Aldo Group, and before that spent a decade at VF Corporation with a variety of responsibilities. Early on, he ran his own retail business in Scandinavia and held senior positions with sports retailer Peak Performance and performance materials company W.L. Gore & Associates.
· Other executive changes include: Paul Fipps, previously chief information officer, has been named chief technology officer; Colin Browne, previously president of global sourcing, has been named chief supply chain officer.
The executive shake-up is part of a realignment aimed at better leveraging Under Armour's digital business, supporting its move toward category management and driving greater operational efficiency across the organization. As Under Armour fights to regain its number two spot in the space from rival Adidas, a streamlined workforce and strong leadership are key to turning around its business.
Under Armour faces particular headwinds in North America, where first quarter revenue declined 1%. Meanwhile, international revenue (including sales in Europe, the Middle East and Africa, the Asia-Pacific region and Latin America) represented 20% of its total revenue in the quarter and rose 52% (or 57% on a currency-neutral basis) during that time. Gross margin was down 70 basis points to 45.2% in the quarter, as benefits from channel and product mix were offset by continued efforts to square inventory with market demand.
Frisk, who is joining the company during a period of muted growth, will be charged with overseeing the retailer's go-to-market strategy and will execute its long-term growth plan.
With maturity comes a certain plateau, Neil Saunders, managing director of GlobalData Retail, said in a note emailed to Retail Dive. The sector is under pressure, with bankruptcies (including last year’s collapse of Sports Authority, once the largest sporting goods retailer in the U.S.) limiting domestic wholesale activity, stiff competition helping drive down retail prices and general softness in wider retail.
But some of Under Armour’s woes do stem from its own particular weaknesses, Saunders said. “[W]e do not believe that the travails of the U.S. sports market are solely responsible for Under Armour's lackluster performance,” he said. “Especially as a number of other sporting brands and retailers have done relatively well over a similar period. … While we believe that the brand remains innovative, we do not believe it put its best foot forward over the first part of this year with a lack of range and product innovation making it difficult to generate consumer interest."