Under Armour plans to undergo another round of layoffs after sales are expected to drop by over 10 percent this fiscal year.
The cuts were announced this week by CEO Kevin Plank.
Plank said: “We are simply doing too much stuff.
“There are too many products, too many initiatives, too much of too much.”
His strategy to revive the brand focuses on simplifying the product lineup and creating more impactful offerings.
The revenue decline is partly due to Under Armour’s new strategy of positioning itself as a premium brand.
The company is reducing the discounted merchandise it sells to wholesale clients.
Instead, it will offer higher-priced, exclusive products through its stores and digital channels.
Under Armour’s stock peaked at $52 in 2015 during a period of robust sales growth.
However, it has struggled amid leadership changes and various restructuring efforts in recent years.
“We are simply doing too much stuff”
As of early Thursday, the stock was trading at $6.74, showing little change after rebounding from a premarket drop.
Plank stepped down as CEO in 2019 following employee complaints about the company’s workplace culture, though he remained involved as chief brand officer and the company’s largest shareholder.
Under Armour initially gained success by selling sweat-wicking clothing for athletes and securing major endorsement deals with colleges and athletes.
However, its expansion into basketball sneakers and lifestyle products has not been as successful.
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Plank’s new turnaround plan will take around 18 months to implement.
This new approach comes a year after former CEO Stephanie Linnartz introduced her strategy for the struggling brand.
Under Armour plans to focus on faster innovation, to introduce products within six to 12 months.
One example is the recent release of its $45 StealthForm uncrushable hat.
The company did not specify how many jobs would be affected by the restructuring, but as of March 2023, Under Armour had approximately 15,000 employees, including 10,000 in its retail stores.
The company expects to incur charges of about $70 million to $90 million this year.
Under Armour will reduce its reliance on consultants and outside experts, particularly in marketing, which Plank said had reached unacceptable levels as part of its cost-cutting measures.
The company is also in the process of hiring a new chief marketing officer.
