Categories Retail

Adidas and Nike are showing the new kid Under Armour its place

In the wake of Adidas’ rise in the sports apparel industry, Nike and Under Armour are feeling the heat.

Courtesy – Pixabay

While Nike can be regarded as a veteran, with Under Armour catching up in terms of brand value and sponsorships, it is only fair to pit these two companies against each other.

Under Armour needs new armor

Under Armour has been showcasing impressive revenue growth since its 2005 IPO. Back then it was referred to as a Wall Street darling, often even touted as ‘the next Nike.’

However, the brand failed to maintain its charisma in the course of the last decade.

With North America making up a chunk of its core market — about 75% of sales — this dependence has started to cost Under Armour with performance in the geography on the decline.  This led to Under Armour reporting its first-ever net loss during the second quarter of 2017. Just when Under Armour was fighting for its survival, things got worse as its key retail distributors like Sports Authority and Sports Chalet filed for bankruptcy.

Under Armour’s signature shoe Curry 4 that created a lot of hype suffered not only from manufacturing delays but also received some bad reviews. This led to the exit of Peter Ruppe, Under Armour’s chief footwear executive.

The performance gear maker also failed to maintain its business in the crucial overseas markets like China — where Nike has managed to stay ahead in this game.

Nike, still checking a few boxes

China has grown to become Nike’s second largest market. This growth is estimated to help the sports giant survive in the ever-challenging industry of sportswear.

Nike, that made a bold promise of generating close to $50 billion annual revenue by 2020, has been one of those consistent performers. The industry veteran has managed to put up a steady growth in its revenue.

Nike is not losing it so soon to its bigtime rival Adidas. It is working on ramping up its innovation department — something to go hand in hand with its strong management team as well as daring marketing strategies.

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