Eleven years ago, Kevin A. Plank was a walk-on football player at the University of Maryland who relished throwing his body at hulking opponents. But he hated how the cotton T-shirts under his uniform got sopping wet with sweat or rain. By then, cycling outfits and football undershorts were made with moisture-wicking synthetic fabrics. Plank, a starter during kickoffs and punts, wondered why not gridiron T-shirts, too? He tore the content label off a pair of his wick-away shorts, bought the same material from a fabric store, and gave a tailor $460 to sew seven shirts. "I set out to build a better football undershirt," he says.
Plank's teammates loved the tees. So he drove to New York's garment district, had hundreds more samples made, and dubbed his invention "Under Armour." Now, at 33, Plank is the multimillionaire head of an athletic apparel powerhouse. Sales of Under Armour Inc.'s skintight shirts and other products have soared an average annual 78.3% for the past three years, to $310.6 million over the past 12-month period. That lands the company at No.6 on BusinessWeek's Hot Growth ranking, with no slowdown in sight. "Under Armour could be the next Nike (NKE)," says Wachovia Securities (WB) analyst John P. Rouleau.
NO INSTANT SUCCESS.
Yet it didn't happen as fast as Plank originally expected. "At 23, I was probably the smartest guy in the world," he jokes. Several dozen players he knew from his post-high school year at Fork Union Military Academy in Virginia or from the University of Maryland had made it to the National Football League. He figured he'd send them shirts, the money would roll in, and "I'd be on easy street in no time," he recalls. "But I learned early on [that] this is not about one blast of exposure or one person wearing the product."
Operating at first out of his grandmother's Georgetown house, Plank spent four years tirelessly pitching his product to college and NFL teams. "We convinced these big tough football players to start wearing tight-fitting synthetic shirts, which was completely new and different," he says. In addition to stars such as Jeff George, Jerry Rice, and Plank's Maryland teammate Frank Wycheck, big names in other sports, such as pitcher Roger Clemens, became Under Armour fans.
The pros' acceptance brings Under Armour an authenticity that advertising alone can't create. Dick's Sporting Goods Inc., a large national chain that's one of Plank's biggest retail partners, has set up special Under Armour "concept shops" within six of its stores. "Our goal is to have athletes of all ages know that we are the headquarters for Under Armour products," says Jeffrey R. Hennion, Dick's chief marketing officer. The appeal, he adds, is the notion that Under Armour can help anyone perform at a higher level. That cachet also gives Plank license to charge $40 for a short-sleeve T-shirt.
COMPETING WITH NIKE.
If Plank stumbles, it could be over the giant shoes of Nike, which has its own line of tight, wick-away clothing. For now, says Banc of America Securities (BAC) analyst Robert F. Ohmes, the competition may be helping Under Armour. "Nike coming in and doing a good job in the space is expanding the category," he says. Under Armour now holds a commanding 78% share of the $416 million market for tight athletic garments.
Under Armour, which raised $112 million in a November initial public offering, has also been reaching beyond its core niche. In 2003 the company launched a line of women's apparel, and added children's clothing in 2004. Sales of the women's line jumped 112.1% in the first quarter of 2006 vs. the same period a year ago, while youth sales soared 119.7%. Now Plank is venturing into shoes, with lightweight, moisture-wicking football cleats due out soon and baseball cleats planned for next spring.
Plank remains determined to show that scrappy underdogs can compete with the big guys. He fully expects Under Armour to hit $1 billion in annual revenues. "What makes us different is the chip on our shoulders," he says. "We have something to prove, and it keeps us humble and hungry."