Kevin Plank, Chairman and Founder of Under Armour, will step down as CEO of the athleticwear business effective Jan. 1, 2020. Patrik Frisk, current President and COO, will succeed Plank as CEO and will join the company Board of Directors. Frisk will still report to Plank, who will serve as Executive Chairman and Brand Chief after the transition, indicating that the latter will remain involved in the larger direction of the company.
Plank and Frisk will “divide and conquer” their responsibilities in leading Under Armour, the duo told CNBC. Plank noted that Frisk would “make the decisions to run the day to day.”
“Our multi-year, transition approach has ensured purposeful leadership continuity. Patrik is the right person to serve as Under Armour’s next CEO,” Plank said in a statement. “As my partner during the most transformative chapter in our history, he has been exceptional in his ability to translate our brand’s vision into world-class execution by focusing on our long-term strategy and re-engineering our ecosystem through a strategic, operational and cultural transformation.”
This “transformation” could be more actively described as a turnaround, with Under Armour seeing declines in sports apparel sales two years ago, missteps in distribution and continued competition from not only Nike and Adidas, but lululemon, which has done a much better job capturing female audiences. In September 2018, the company cut 400 jobs as part of a $200 million cost restructuring plan, a year after cutting 280 jobs in 2017.
In July, Under Armour lowered its North American sales forecast for the full year, expecting revenue in the region to decline slightly, rather than remain flat. North American sales dropped 3.2% during Q2, although its international business grew 12% and now represents 28% of total revenue.
Frisk has plenty of work on his plate to fully engineer a turnaround across North America. Revenue at Under Armour remains far below the category average over the last six months, with shoes reaching an average of $86 compared with the category average $94, and apparel spend averaging $82 compared with $103 across competitors, according to recent data from investment bank Stifel.
Frisk joined Under Armour in 2017 following nearly 30 years of experience in the apparel, footwear and retail industry. Prior to Under Armour, he was CEO of The ALDO Group, and spent more than a decade in various leadership positions within VF Corporation.
Plank has been the public face of the brand since its founding in 1996, often appearing at events with sponsored athletes or other prominent executives like Richard Branson, as part of Under Armour’s recent partnership with Virgin Galactic to launch new ‘spacewear.’