COLIN BROWNE: CHIEF OPERATING OFFICER, UNDER ARMOUR
The World Federation of Sporting Goods Industry (WFSGI) and McKinsey & Company have teamed up once again to present our third annual Sporting Goods Industry Report “Sporting Goods 2023 – The need for resilience in a world in disarray.”
Here we present the first interview made with Colin Browne, COO of Under Armour.
Chief Operating Officer, Under Armour
Colin, thank you for taking the time. Looking back at 2022, what were some of the main trends you have observed, what changed from prior years, and what is here to stay for 2023?
“It has definitely been an interesting and challenging few years, with 2022 being the cumulation of them all. In 2020, we went into a full lockdown and saw significant revenue headwinds. As we came into 2021, we saw huge pent-up demand, and now in 2022, we are living with the implications of the two previous years. We are currently seeing an increasingly large amount of inventory, which has landed at the same time as softening demand, due to a broader economic environment that has started to deteriorate. I believe it will take some time for demand and supply to right itself, especially as I suspect the economic conditions may continue to worsen as we go into 2023, with impacts on consumer confidence. Beyond this dip, I do think the sports and fitness industry is going to continue to be incredibly relevant going forward. Demand for sportswear, and more broadly for the comfort and convenience that comes with sportswear and a healthy lifestyle, will continue to be important, and I believe we at Under Armour are well positioned to navigate through the choppy waters that lie ahead”
You mentioned impacted consumer confidence and softening demand. Do you see any differences here between different types of consumers?
“I think we will see some polarization: People who are financially more stable will be less concerned about continuing to buy sporting goods. But, as is common during a recession, people with lower incomes will be more challenged. We need to make sure that we are offering products that operate across the spectrum.”
What measures has Under Armour already taken in light of these economic challenges?
“We spent a lot of time thinking about how we ensure that we continue to drive value to our stakeholders. From a business point of view, productivity is an incredibly important metric. That doesn’t just mean saving money, but also doing more with less and in more productive ways. It involves being really thoughtful on SKU rationalization and making sure that you have a good understanding of what your product will do for each consumer.”
If we look at different sports categories you play in, how have these developed over recent years and what is your expectation going forward?
“On a category level, running has been immensely important in the past. And we see this trend continuing, because it is an activity that people can do without needing to go the gym. Even if we experience a recession in the next 18 months, you can always go outside and run.
We also have a smaller outdoor business, which has grown very quickly in the past couple of years, and I see no reason why it would slow down. Again, in a difficult recessionary environment, people will still have the opportunity to spend more time outside, and so I think it will continue to be an important category for us.
We also see good growth with our basketball business, where we have Stephen Curry as a core athlete. In North America, a lot of our business is based on American football and baseball, primarily. We are continuing to outfit team sport athletes and are really working to include them within our brand.
We have also seen major growth over the past couple of years in the golf category. Golf is one of the sports that I think is becoming younger, and more relevant, and is also opening up from a gender perspective.”
Looking forward, what areas are you are planning to focus on in 2023?
“We will continue to refine our offering, and make sure we are providing the right products for athletes, as well as being considerate and thoughtful in how we do that. We are also extending our engagement model with consumers, which we call “the journey to compete”. Historically, we split this journey into three different stages, which were training, competing, and recovering. Now we have added a fourth stage, which we call “live”. This builds on the idea of balance and how to include wellness into your life 24/7, as opposed to just when you exercise. That’s a pivot that I think we are going to see more broadly in society.”
One last question. Looking at the macro trends in the industry in the next three to five years, what do you think are the biggest opportunities?
“I think we will continue to see consumers focus on health, fitness, wellness, and sports. We are undoubtedly in a market that will continue to grow. I also think that the idea of branding and being really clear on who you are, and what you stand for as a brand, will continue to be important in building meaningful, individual relationships with consumers. In addition, sustainability and circularity are clearly going to be big drivers. We published our sustainability report last quarter, and we are incredibly excited about making a lot of progress there. On circularity, I think the industry needs to come together to figure out solutions. We have a responsibility, not only as individual brands but also as leaders.”
About World Federation of the Sporting Goods Industry (WFSGI)
The WFSGI is the world authoritative body for the sports industry officially recognized by the International Olympic Committee (IOC) as the industry representative within the Olympic Family. The WFSGI is an independent association with no objective of economic character for its own gain and formed by sports and sports-inspired leisure brands, manufacturers, suppliers, retailers, national/regional federations, industry and trade associations and all sporting goods industry related businesses. Our purpose is to represent and inspire the industry, to invest in innovation, promote physical activity, support free trade, and do business in an ethical and sustainable way. As part of our mission, we facilitate legally permissible communication and cooperation to enhance competitiveness and innovation. We seek to positively influence the way our products are manufactured, with a focus on people involved in the manufacturing and the environment. Our members are steering the direction of the industry. The future of the sporting goods industry begins with the professional networks that we support.
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