Under Armour Suits Up Stephen Curry to Challenge Nike in NBA Finals

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Stephen Curry
Golden State Warriors player Stephen Curry. Photographer: Andrew D. Bernstein/NBAE via Getty Images

The NBA Finals are more than just a showdown between the Golden State Warriors and the Cleveland Cavaliers. It’s a chance for Under Armour Inc. and star Stephen Curry to challenge Nike Inc.’s decades of basketball dominance.

Under Armour is about a 10th the size of Nike in sales, and it’s up against a company that sponsored Michael Jordan, Kobe Bryant and LeBron James -- players with a combined total of 13 titles. But Under Armour took a chance on Curry, signing him away from Nike before last season. And when the guard brought the Warriors to their first finals in four decades, that bet paid off.

“This is a huge opportunity for us,” said Adam Peake, Under Armour’s executive vice president of global marketing. To capitalize on the moment, the company may air television commercials during the games, he said. It also plans to release Curry-themed videos and other content through social media.

If there ever was a match-up that embodied the David-versus-Goliath state of the basketball-shoe market, this is it. Curry faced long odds to reach this stage. He played at Davidson College, a fringe program, and was often deemed too small to excel in the National Basketball Association. But Curry has made up for his skinny frame with record-breaking shooting, earning him a most valuable player award this season.

‘Chosen One’

He’ll be taking on the Cavaliers’ James, a Nike-sponsored athlete who was anointed “The Chosen One” on the cover of Sports Illustrated in high school. Unlike many players, James lived up to early hype. He’s won two titles and four MVP awards. With his fifth straight trip to the NBA Finals, which start on Thursday, he’s earned the nickname “King James.”

Like Curry, Under Armour is an underdog in its battle with Nike -- the world’s largest sports brand, with about $30 billion in sales. In basketball, the odds are especially stacked in Nike’s favor. It controls about 95 percent of the basketball-shoe market in the U.S., according to research firm SportsOneSource. Under Armour registers in the low-single digits, putting it in third place behind Adidas AG.

Nike dominates globally too. The Jordan brand rules the fashion side of the industry, more than a decade after Michael Jordan’s retirement, and Nike’s other footwear leads in the performance category. Under Armour, based in Baltimore, only started making basketball shoes in 2010.

“Nike can’t even see them in the rear-view mirror at the moment, but they are there, just far back,” said Neil Schwartz, vice president of market insights at SportsOneSource. “You aren’t going to slay the dragon with one basketball shoe.”

Curry One

The Curry One, Under Armour’s first shoe named after a basketball player, was released in February. The product has helped the company’s basketball-shoe sales triple this year in the U.S., according to SportsOneSource.

Nike, based in Beaverton, Oregon, said it’s confident in its market position, given its partnerships with James, Bryant and Kevin Durant -- last season’s MVP -- and ability to make innovative products.

The Curry shoe sold out, thanks in part to limited supply, Schwartz said. Under Armour kept inventories low, a strategy Nike has used for decades to drive demand, he said.

‘Amazing Job’

“Steph Curry epitomizes Under Armour’s attitude and where it’s come from,” Schwartz said. “They’ve come in and done an amazing job of going from nothing to something quickly.”

But even when a shoe company is blessed with a red-hot athlete, it can be hard to capitalize on it. Just ask Reebok. The company had Allen Iverson -- another sensational shooting guard -- when he was arguably the most popular player in the league. He did little to chip away at Nike’s empire. Even several versions of Nike’s signature shoe for James didn’t sell well, said Matt Powell, an analyst at research firm NPD Group Inc.

“They have to be very careful,” Powell said. “The immediate reaction will be to make a gajillion pairs of shoes and squeeze everything out of this. That’s not the way to grow a shoe business. You want them to sell out and for people to be hungry for the next one.”

With his arrival in the finals, Curry’s exposure and popularity will probably surge. Games are shown on cable TV in the U.S. during the semifinals, and then the Finals shift to prime time on broadcast network ABC, helping them reach a bigger audience. With the games reaching more than 200 countries, the number of international viewers also grows.

‘Little Guy’

Curry’s diminutive stature -- at 6-foot-3, 190 pounds -- only adds to his appeal, according Shawn Bryant, a former NBA executive who specialized in player marketing. James, in contrast, is a sculpted 6-foot-8 and 250 pounds.

“When you see him on the court he looks like he’s a little guy,” Bryant said. “Kids can relate. That’s really important.”

Curry’s 2-year-old daughter, Riley, also has broadened his appeal. She’s become a star in her own right during the playoffs after appearing on her dad’s lap during post-game press conferences.

Under Armour has been proving skeptics wrong since Chief Executive Officer Kevin Plank founded it as a workout-shirt maker almost 20 years ago. Now it makes all manner of sporting goods, and sales have doubled in the past three years to more than $3 billion. Through Wednesday’s close, the stock rose 53 percent over the past year.

Long Run

Plank’s ultimate goal for Under Armour is to supplant Nike as the biggest sports brand in the world, and he knows the path there is through basketball. While soccer has more fans, it doesn’t generate as much apparel and footwear sales as hoops. That’s mainly because it hasn’t crossed over into casual wear as much, and pro soccer remains a niche sport in the U.S.

The NBA has been adding to its huge U.S. fan base by marketing overseas for years and turned players like Jordan, Iverson, Kobe Bryant and James into global stars. In basketball, big names are what drives sales, more so than in other sports. And Under Armour needs an international star, given that about 90 percent of its revenue comes from North America.

Basketball also has much-coveted cachet with teens and 20-somethings because of its ties to urban culture, style and music. These are inroads that Under Armour, which historically has a stronger connection with suburbanites, wants to make.

“The culture of basketball -- being part of that conversation as a brand -- is something we’re really excited about,” said Under Armour’s Peake.

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