Kevin Plank is planning some big changes for himself and for his company, Under Armour. Beginning in 2020, he stepped down as Chief Executive Officer and has handed that role over to Chief Operating Officer Patrick Frisk, who has been in the retail marketing business for years.
Frisk will still report to Plank, who plans to be just as involved as ever. Plank is now Executive Chairman and Frisk will handle the day-to-day business of running the Under Armour Company. Plank will be more directly involved with the product itself and has been named the Brand Chief.
Kevin Plank called it an “evolution” of the company. He will focus more on developing the product and less on the details of running the company, which is what he is handing over to Frisk. Several companies have done similar things over the years. Bill Gates made a similar move with Microsoft, as did Ralph Lauren with his fashion empire.
This is often the problem CEOs face with businesses they built from scratch when the company is as successful as this one. The company gets too big for the CEO to be involved in the things that made the company successful to start with. A study by Harvard Business Review noted that in such big companies, it is not possible for CEOs to be involved in most decisions that are made at various levels in the company.
Plank started the company in 1996, operating out of his grandmother’s house. He started by making sweat-wicking undershirts for a local tailor. The undershirts moved perspiration away from the body. That operation has grown into a $5 billion business today.
To say the company has been successful is an understatement. The idea of underwear wicking moisture away from the body revolutionized athletic wear. When Plank started doing it, he was one of the few that had the idea. Today it is common among almost all clothing of this kind.
Like most big companies that have great and fast success, a period of staleness sets in. Under Armour needed a jolt of creativity or a spark to get it more focused on what brought it success in the first place. Kevin Plank hopes this move will get the company back on track and headed in the right direction. It is not that the company is in deep trouble, but it does have some issues, and sales are dwindling in North America.
Plank wants the move to allow him to do more of the things he did in the beginning, which made the company wildly successful. <
Plank said in a Fortune magazine article that the move would allow him to focus more on the big picture. “It’s also freedom for me to get out of the weeds,” he said.
He is also confident that he is turning the day-to-day business operations over to capable hands. Frisk has been in the retail business for 30 years and has been with Plank since 2017. He has played a major role in reorganizing how the company works over the last few years.
The move may come as a surprise, but a Baltimore Business Journal story announcing the move noted the change has been in the works for some time. The writer points out that Frisk often speaks of day-to-day operations, while Plank speaks more in philosophical terms when both are talking on the record about the company.
In making the announcement, Plank called it a “three-year transformation.” Over those three years, Frisk has reorganized the management structure and created new processes for developing products and bringing them to market. Frisk will be taking on the title but maybe not that much more work as it seems he has gradually moved into that position anyway. The bigger change will actually be for Kevin Plank as he is not leaving Under Armour by any stretch.
“Under Armour is my heart and a full-time job. This is an evolution of company leadership that is reflective of how we are operating today,” Plank wrote in his letter to employees announcing the move. Under Armour has been very successful, and Kevin Plank believes this move will help him reach the goal of making it the best athletic brand in existence.
As the year 2020 begins, Plank will continue to be in charge of the board of directors. He will focus on product evaluation and elevating the brand story. He also wants to develop current and future partners in the business. In some respects, he will be back in the trenches working on the product as he did in the very early days but is by no means giving up control of the company.
Plank called the move “a unique opportunity which I hope will probably be looked at as one of the most successful founder transitions that can be out there.”
Working on improving the products and inventing new ones will also be part of Kevin Plank’s strategy going forward. Sales have declined over the past few years in North America, at least in part due to competition from companies such as Nike, Puma and Adidas. Even so, as the year ended, stock prices were up 13.8 percent. The company may have experienced some issues then, but it is clear that it is not in serious trouble. While North American sales declined by six percent, worldwide sales were still stable enough to keep the stock value going up.
Late in 2019, Under Armour announced a partnership with Virgin Atlantic to design and make spacesuits to be worn by Virgin Galactic travelers when the company makes its first flights. Under Armour also had a lot of good fortune in the NCAA basketball tournament as two of the teams that use its product were in the Final Four. The company also announced the opening of its first store in India.
Frisk downplayed the lower sales in North America. He said more people coming into the stores actually bought something and the number of things individuals bought increased as well.
Only time will tell what the future holds for Kevin Plank and Under Armor. The company has its struggles as all companies do. Kevin Plank and the rest of the company seem to be taking action to try to get positive answers to the question of what the future holds for Under Armour.
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