When David W. McCreight took over as president of Under Armour more than a year ago, he came to a company that in many ways was the polar opposite from where he was working at Lands' End.
Lands' End was nearly a half-century old with roots in the catalog business and looking for ways to revive, grow and stay relevant. Under Armour was an up-and-coming, vibrant company with marketing campaigns that resonated with the younger generation and plans to expand its line of athletic wear.
"It was really sort of a once-in-a-generation sports brand opportunity," said McCreight, 46, who said the job allows him to combine his passion for sports with that of running a company.
But he also took over at a challenging time for the 13-year-old company, as the country works to pull itself out of the worst economy since the Depression. Consumers are spending less, and the retailers that sell Under Armour products are cutting back on inventory. Much of the company's success has come from entering retail categories that had been untapped or had room for improvement, such as compression wear and cross training shoes.
Under Armour is entering categories that are more competitive and harder to break into, and that could determine how well the company is suited to continue to compete against giants such as Nike and Reebok. Under Armour recently said it was revamping its running shoe and replaced its head of footwear after sales were not up to expectations.
McCreight recently sat for an interview with The Baltimore Sun and talked about taking over the helm of Under Armour. The job arose after founder, chairman and CEO Kevin Plank split his duties in a continued effort to beef up management ranks as the company becomes a bigger player in sports apparel.
"Unlike other companies that I had the chance to work with, the more time I spent at Under Armour I actually realized there was more opportunity than I ever realized when I got here," he said. "More often than not, you enter a company, and you talk about that honeymoon period that eventually ends."
McCreight acknowledges that times are hard, but said Under Armour is still growing and hiring, and will expand into new offices in December. The additional 135,000 square feet is across the street from company headquarters at Tide Point in South Baltimore and will include showrooms as well as offices.
He said the running shoe met many of the company's goals, including putting out a high-tech shoe that would resonate with consumers. He said the firm could work on pricing and improve the technology of the shoe even more.
"I think we learned a great deal," McCreight said. "We knew it would be a multiyear journey, so we'd rather get in the field, play offense, set our expectations and then continue to adapt and evolve the strategy."
R.J. Hottovy, an analyst with Morningstar, said the running shoe did well for the company's first effort in the market. But "I think there is more they can do," he said. "It's been well-received, but it's a large space and I think they could capture more of that with a retooling of the product. They could be doing things better."
McCreight said the recession may have "modulated" the company's planned growth and that stores that sell Under Armour products are watching inventory levels as consumers continue to curb spending.
Under Armour has said that it is controlling costs to help offset the impact of the economy. Plank cut his salary last year, and the company has opened outlet stores to help sell excess inventory.
"Under Armour is still growing," McCreight said. "Some people will argue that others companies are retrenching and Under Armour is actually posting growth. Year over year, we're going to invest more in the product and more in the future than cut back."
McCreight said the company will maintain its pricing despite the slowdown in the economy and that the company will discount only when introducing a new line. They price of the running shoe was recently discounted as the company works to improve the line.
"At times you'll see us bring prices down, but that's often a setup for the next big innovation for us to deliver," McCreight said.
Innovation will be key to the company's future growth, he said. McCreight said 2011 will be a big year for new products, though he declined to say what the company would bring to market. This year, Under Armour introduced mouth guards and a body suit that it says will help athletes recover from a workout faster.
The company continues to work on its international plan with a slow approach. It has quietly set up distribution networks and established endorsement deals with rugby players and other athletes in Europe and Asia. It has signed Lindsey Vonn, a U.S. Olympic skier, and the company is the official kit supplier for the Welsh Rugby Union and for the German soccer league club Hannover 96. The company is also the official sponsor of athletic performance apparel for the Toronto Maple Leafs.
