Under Armour to open retail site in Annapolis

Its first full-priced store viewed as marketing tool

May 24, 2007|By Andrea K. Walker | Andrea K. Walker,Sun reporter

Sports apparel maker Under Armour said yesterday that it will open its first full-priced retail store at Westfield Annapolis Mall as a new front in expanding its marketing and branding prowess.

The company, which makes athletic wear that wicks sweat from the body to help maintain temperature, disclosed this month that it would be entering the retail business but didn't disclose the location. Under Armour currently operates only outlets, selling discounted merchandise; it sells its apparel and footwear mostly through major sporting-goods retailers.

The new, 4,500-square-foot store, slated to open Nov. 1, will sell a full range of Under Armour gear, from golf apparel to football cleats. Company executives said the store will be as much of a marketing tool as a sales vehicle.

"Walking into an Under Armour store will be like walking into an Under Armour commercial." Kevin Plank, Under Armour's CEO and president, said in an interview.

"It's meant to be a gathering place. If you're an athlete you want to see the latest and greatest of Under Armour. There are no limits for having our very best product in one location."

The company would not say how much it will invest to open the new store or advertise it.

Under Armour executives said that they don't expect company stores to take sales away from its main retailers, such as Dick's Sporting Goods.

Instead, they hope the two will complement each other. Under Armour plans other stores in areas where its products are not widely available at retail. It hasn't decided yet how many more stores it will open, said Plank.

The company chose Annapolis for its first retail store because it is close to home and because there are not many competitors selling its products in the area. The mall is also undergoing a major expansion and renovation.

Several other manufacturers and non-retail companies have opened stores over the years with various outcomes.

"Not too many manufacturers do it because it's a totally different business," said Mike May, a spokesman for the Sporting Goods Manufacturers Association.

Nike Inc. has had success with its Niketown stores, which have become as much of a tourist attraction as a retailer. A spokesman said that the stores are profitable. On Tuesday, Nike announced it was expanding its retail concept even further, partnering with Foot Locker to open "House of Hoops" stores that will exclusively sell basketball gear.

Garmin International, which manufactures navigation and Global Positioning System technology, opened its first retail store on Chicago's Magnificent Mile shopping strip last year.

"While it's important we sell devices, it's as much a billboard and marketing tool as anything," said Ted Gartner, the company's media relations manager, who said that sales have been good at the store.

Gartner said there are no plans to open additional stores and he doesn't see the day when there will be "a store on every corner."

Other companies have found it tough to enter the retail business because it can be expensive to operate a retail store.

"I think that may not always be the best strategy," said Britt Beemer of America's Research Group, which tracks consumer shopping habits. "Companies can use the store as a way to get people to see them. They become more visible. But there is a cost to that. There is the cost of the overhead of running retail stores."

Sports apparel company Fila Inc. recently said it was closing more than a dozen retail stores that don't turn a profit. Discovery Communications Inc. announced last week that it was selling its money-losing, mall-based and stand-alone retail stores, including three in Maryland. It will now partner with other retailers to sell its products.

But retailers and experts in the industry said there are advantages to opening company stores. For one, companies can better control the display of products.

"For Nike, it was about having a better presentation at retail and a better integration story," said Nike spokesman Derek Kent. "It gives them a better experience when they walk through the door. From every wall you look at you see the brand represented and obviously that's an advantage."

Retail stores also offer alternative distribution options.

Plank said earlier this month that he expects the retail store to be profitable in the first year.

"What I don't think the world needs is a slightly better athletic retail store," Plank said. "It's our job to redefine the paradigm of what the consumer and the athlete are looking for."

andrea.walker@baltsun.com

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