Ratti Report predicts another account review: Under Armour (free to see)

Ratti Report predicts another account review: Under Armour (free to see)

Steve’s breakdown: As predicted earlier this week, a company can’t just sit around when the stock tanks and not review advertising. This time it’s the media planning & buying for Under Armour.

BALTIMORE, MD: Under Armour is reviewing for a new media agency, according to people with knowledge of the matter.

Omnicom Media Group’s Optimum Sports has been working on the business since 2011. Representatives from Optimum Sports and Under Armour were not immediately available for comment. Droga5 continues to serve as the brand’s creative agency partner. Last year, the agency captured the intense, rigorous and solitary training rituals of Olympic gold-medalist swimmer Michael Phelps in an Under Armout spot that took home the Grand Prix in the Film Craft Category at the 2016 Cannes Lions International Festival of Creativity.

Under Armour spent $20.6 million on measured media in the U.S. in 2015, according to Ad Age’s Datacenter, and about $10.1 million on measured media in the U.S. from January to November of last year.

Earlier this week, CEO Kevin Plank, a member of the Trump administration’s American Manufacturing Council, said on CNBC that the Republican president is “real asset for the country.” The statement hasn’t set well with Under Armour’s celebrity spokespeople, such as NBA superstar Stephen Curry, prominent ballet dancer Misty Copeland and Dwayne “The Rock” Johnson, who has an apparel line with the brand.

Following the backlash around Mr. Plank’s pro-Trump statement, Under Armour came out against the president’s ban on refugees from seven Muslim-majority countries, saying the company believes “immigration is a source of strength, diversity and innovation for global companies based in America.”

Under Armour is facing slowing sales after years of robust growth as consumers’ appetite for sportswear declines. The Baltimore-based brand missed analyst expectations for the fourth quarter during the crucial holiday season. Revenue for the period was up 12% to $1.31 billion, Under Armour’s slowest growth in nearly a decade, according to reports. Net income fell 0.7% to $104.9 million. So far this year, Under Armour’s stock has fallen 25% and currently trades around $19.30.

Matt Powell, VP-sports industry analyst at market research firm NPD Group, noted in a recent blog post that sportswear brands are seeing struggles because of over-promotion and the exhaustion of the “athleisure” category now filled by the likes of fashion designers and mainstream retailers.

“Hundreds of new brands tried to jump in on the performance apparel boom,” wrote Mr. Powell in the report. “As they fail in 2017, the market will be flooded with deep discounts on poor imitations of activewear.” He said that brands need to innovate in order to keep sales afloat.



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