Under Armour moving headquarters to Baltimore Peninsula next week
Under Armour's long-awaited move into a new global headquarters in South Baltimore will begin next week, President and CEO Kevin Plank told investors Thursday morning.
The company's arrival to the five-story, 280,000 square foot building is a watershed moment for the Baltimore Peninsula, the ambitious development project that's been almost a decade in the making. Development officials have pointed to Under Armour's move as the event to tip the scales of the development and hasten the openings of other businesses and restaurants.
Approximately 1,500 employees — Under Armour calls them "teammates" — will work out of the new headquarters when the move is complete, a company spokeswoman said.
During Thursday's quarterly earnings call, Plank also told investors the headquarters will feature Under Armour's flagship retail store that will serve as "a living laboratory" for its newest products. These include an update to the SlipSpeed sneakers, a shoe for the NBA's De'Aaron Fox, and products made of a new, high-tech spandex called Neolast.
Under Armour continues to embark on what Plank calls a company "reset," as the Baltimore-based sports apparel brand works to reduce its products by about one-quarter and end its reliance on discounts. Plank said he wants to compete with other sports brands on "science and design" not price . And the company plans to pour money into marketing, telling athletes young and old how Under Armour's T-shirts, shorts and shoes will help them win.
"It's really about selling so much more of so much less," Plank told investors.
Although revenue was down 11% to $1.4 billion in the last quarter, the company beat its forecasts slightly. Similarly, the company now expects its operating loss for the fiscal year to be $176 to $196 million, compared to a previous forecast of a $220 to $240 million loss. Investors took notice and Under Armour shares that closed Wednesday at $8.75 jumped to $10.50 at the start of trading Thursday and continued to climb.
Plank returned last April to lead the company through the turnaround; he had stepped down as CEO in late 2019.
A former University of Maryland football player, Plank founded Under Armour in 1996 and hit the road to sell his distinctive sweat-wicking T-shirts and compression shorts to college football teams. Nine years later, in 2005, the company's initial public offering almost doubled the share price on opening day. Under Armour was an immediate darling to investors. The company reported 26 consecutive quarters with net revenue growth of greater than 20%.
The streak broke in 2017. Under Armour reported quarterly revenues lower than expected and the chief finance officer suddenly resigned. Shares plunged by about 25%.
Investors filed a class action lawsuit against the company, accusing Plank and other executives of manipulating sales figures to inflate revenues. These tactics kept the streak going well after key sales in North America slumped, according to the lawsuit. A Securities and Exchange Commission investigation echoed the allegations and accused Under Armour of misleading investors about the quarterly revenues. Under Armour agreed to pay $9 million to settle those charges.
The investors' lawsuit dragged on for seven years. On the eve of trial in June, the company and investors announced they had reached a $434 million settlement . Investors' attorneys told the judge that amount ranks as the second-largest securities settlement ever in Maryland. They put the settlement in the top-50 largest in a securities fraud lawsuit.
Attorneys for Under Armour and the investors were due in U.S. District Court in Baltimore later Thursday morning to finalize the settlement. Under Armour has admitted no wrongdoing.
More recently, Under Armour collaborated with fashion house Balenciaga . The company tapped rocker-designer John Varvatos, famous for inventing boxer briefs at Calvin Klein, as its new chief design officer. And Under Armour hired Puma's Yassine Saidi — the most influential man in streetwear , Vogue once wrote — as chief product officer.
The company has also shaken up its executives with the hiring of Eric Liedtke, a 26-year veteran of Adidas, as Under Armour's new executive vice president of brand strategy.
