Under Armour recently realised to get its ambitious goal of becoming a $US10 million, it will need to add footwear to its mix.
Based on the brand, that initiative is doing great. Footwear sales in the last quarter of 2016 were up 36%, according to the company’s own metrics.
But that number doesn’t tell the whole story. According to another number by industry analysts at NPD Group, the sales of Under Armour’s footwear actually fell 20% in that same period.
These numbers are accurate. How is the fact possible? Under Armour’s number includes sales right to customers as well as sales to wholesalers, as the FEC requires, whilst the NPD number measures actual sales to consumers.
The discrepancy is explained by the fact that Under Armour Outlet sold a great deal of shoes to retailers, but those retailers couldn’t move them. This means inventory piled-up, causing difficulties for retailers and necessitating discounting, industry analyst Robin Lewis writes on his website The Robin Report.
That’s not great news for Under Armour’s star-powered footwear business, which contains seen sluggish development in its models endorsed by all-star basketball player Steph Curry. Basketball footwear sales industry-wide were down about 20% in 2016.
The athletic shoe industry in general has shifted to lifestyle and retro styles, which Under Armour has limited offerings. NPD analyst Matt Powell called retro styles “the dexjpky43 player from the athletic footwear market” growing at 29% through October of 2016. Unlike Adidas and Nike, Under Armour does not have decades of footwear styles to attract inspiration from and it has virtually absolutely nothing to offer in this category.
Under Armour overall is shifting strategy after a disappointing quarter, admitting that it missed the athleisure trend.