Kevin Plank: The Rise of Under Armour

Think like an entrepreneur. Create like an innovator. Perform like a teammate. The now famous ethos of Kevin Plank, founder and former CEO of one of the biggest sportswear companies in the world, Under Armour. Unlike its major rivals Adidas, Nike and Reebok, Under Armour is still a surprisingly young brand but one that has grown exponentially in a very short time. It’s also a brand that came into existence because it’s future CEO was the sweatiest man in the football locker room. This is the story of the meteoric rise of Under Armour and its founder Kevin Plank.

Plank, a Roman Catholic, grew up in Kensington, Maryland, a suburb of Washington D.C., he was the youngest of five brothers born to William and Jayne Plank. His father was a prominent Maryland land developer and his mother was a former mayor of Kensington, who went on to direct the Office of Legislative and Intergovernmental Affairs at the United States Department of State under President Ronald Reagan. Plank grew up playing youth football with the Maplewood Sports Association; a Maplewood team has appeared in Under Armour commercials. He left the prestigious Georgetown Preparatory School, a Catholic school, due to poor academic performance and behavioral issues, then went on to graduate from another Catholic school, St. John’s College High School, in 1990. Afterward, he played football at Fork Union Military Academy for a year, trying to get the attention of NCAA Division I schools. He was not recruited by the top-tier collegiate football programs. However, he went to the University of Maryland, College Park and walked onto the team there. He graduated in 1996 with a bachelor’s degree in business administration.

ALWAYS HUSTLIN’

Kevin Plank has always described himself as a hustler and in an interview with inc.com in 2003, Plank shared his first memory of realizing he was good at business. “When I was 14 or 15, my brother Scott, who works with me at Under Armour, came back from Guatemala with a bunch of knitted bracelets you see at Grateful Dead shows. Scott had this proposition for me and my brother Colin: “Listen, there’s a Dead show coming to town. We’ll go down and sell these bracelets and make a lot of money.” We took the subway down. At noon, Scott said, “We’ll meet back here in three hours.” Later, we meet up. Colin–he’s a writer and works for Disney in L.A. now–said, “I sold the first two. Then I started feeling guilty about how much money I was charging, so I gave the rest away.” Scott, who’s more of a finance guy who loves the Wall Street thing, says, “I made about 70 bucks.” I say, “I have about 580 bucks in my pocket. And I need more bracelets.” Right there, I knew I was pretty good at this.” And it was his gift of the hustle that led to various business ventures for the young man, but it would be thanks to his college football career and his disdain for sweat-soaked cotton t-shirts that would spark the billion-dollar idea.

NO SWEAT

Becoming frustrated with his t-shirts constantly sticking to his body and listening to complaints from teammates, Plank decided to look into a material that would absorb the sweat but still keep the shirt as light as possible. In the 2003 inc.com interview, Plank fondly remembers the initial stages of his hunt for the no-sweat t-shirt. “The idea was to create a T-shirt that wouldn’t hold moisture–more important, that wouldn’t hold the moisture’s weight. As I developed the prototype, I began to get samples out to a network of college and pro players I had access to. From high school and college, I knew guys like Jermaine Lewis and Frank Wychek and Eddie George, players who had gone on to play in the NFL. I remember reading about this small apparel company that sent Mike Tyson a hat, back in the early ’90s. Out of nowhere, he put the hat on during a post-fight interview. These guys ended up getting orders for a quarter of a million dollars. There was a little of that to my thought process. I probably had about 20 grand in the bank when Under Armour started. A lot of money for a college kid. I ended up going to just under $40,000 in credit card debt spread across five cards. In the summer of 1997, I was totally broke–so broke I needed to go to my mom’s house to ask if she minded cooking dinner for me. I needed for her to feed me. Then all of a sudden I started getting my first round of orders.”

Plank originally wanted to call his new sportswear company Heart, but could not get the trademark. He also attempted to name his company Body Armor, but efforts to trademark that name were also unsuccessful. One day, his brother asked him, “How’s that company you’re working on … Under Armor?” The name stuck. Plank said he chose the British spelling “armour” because he “thought the phone number 888-4ARMOUR was much more compelling than 888-44ARMOR”. Plank initially ran the business from his grandmother’s townhouse in Georgetown. Under Armour’s first shirt was the #0037, which Plank sold from his car. He also asked his former teammates to try on the shirts, claiming that his alternative to a cotton T-shirt would enhance their performance on the field. As his friends moved on to play professionally, he would send them T-shirts, requesting that they pass them out to other players in their locker rooms. His first big team sale was to Georgia Tech.

When asked by Mark Hyman from inc.com where Plank felt things started truly happening for him and his brand, Plank firmly stated it was due to word of mouth.

“In September of 1996, the phone rings. It was the equipment manager for the Atlanta Falcons. He says, “Hey, I was in the Georgia Tech equipment room”–where I’d made my first sale–“and I love the product. Do you make the shirts in long sleeve?” My response was: “Of course we make it in long sleeve.” Then I get in my car, drive to the contractor, and try to figure out how to make the shirts in long sleeve. I was sitting around the house and the phone rings. It’s the equipment manager from Arizona State: “Do you guys make anything for cold weather?” Of course we make something for cold weather. The vital nature of our product is word of mouth.”

By the end of 1996, Under Armour had sold 500 Under Armour HeatGear shirts, generating $17,000 for the company. Things were happening for the young entrepreneur but he knew he would need to take a risk for the brand to truly take off and become the massive company he knew it could be.

GO BROKE OR GO HOME

Fast-forward 3 years and the big turning point for Plank and his Under Armour brand came late in 1999, when Plank used nearly all of Under Armour’s money, and employees agreed to go without pay for a few weeks, so the company could take out a $25,000 advertisement in ESPN: The Magazine. The ad resulted in $1 million in direct sales for the following year, and athletes and teams began buying the product. Within 10 years Under Armour went from a small sportswear company that struggled to pay for a magazine advert to a $1 billion annual revenue company and its founder and CEO went from a former sweaty football player living with his grandma to a billionaire in less than 14 years. Between 2014 and 2016, Under Armour spent close to $1 billion to acquire makers of activity- and diet-tracking mobile apps. Many long-term employees questioned Plank’s strategy and whether the company would produce a return on their investment. Plank spent hours in one-on-one conversations to try and persuade those employees. “It was important,” Plank said, “that this not just be my decision”. The strategy was a success, earning the company the world’s largest digital health-and-fitness community, with 150 million users.

GOOD PRODUCTS SELL

One major thing that sets Under Armour apart from its rivals is that of player sponsorship. Unlike the multi-million dollar deals Nike and Adidas sign with stars like Cristiano Ronaldo and Aaron Rodgers to be brand ambassadors and move products, Plank sees Under Armour’s approach as the opposite.

“We don’t pay athletes millions to wear our brand. We don’t have to. Our model is getting to the athletes–supplying them with a great product that helps them perform better. Which helps a guy like Barry Bonds make $18.5 million a year. My contractual relationship with Barry Bonds says: If I ever pay anybody more than I’m paying Barry Bonds, I have to pay him more. Right now there’s not an athlete on our payroll that we pay $5,000 on an annual basis. Roger Clemens wears our product. He’s done two photoshoots for us and appeared in advertising. Mainly, we compensate him through the charities he supports. We’re getting a lot of exposure with Playmakers. They were looking to authenticate the series as true football without having use of NFL marks. Using our product does that. The perception is that Under Armour is where the pros are.”

And it’s that philosophy that has turned Under Armour from sports underdog into a world leader in the sportswear industry. In 2019, Plank employed over 15,000 people with Under Armour, which is based in Baltimore, and has an estimated net worth of $1.9 billion, according to Forbes in 2019. He also sits on multiple boards in the U.S., including the Board of Trustees at the University of Maryland’s Robert H. Smith School of Business, the Board of Directors at the Baltimore City Fire Foundation and the Board of Trustees at the National Football Foundation and the Sporting Goods Manufacturers Association.  As CEO, Plank oversaw a company that generated US$5 billion in annual revenue and a company that is seen as u true innovator in the sportswear industry. Not bad for a kid that hustled bracelets and sold counterfeit t-shirts at music concerts. Plank announced his retirement as CEO, in October 2019, and was succeeded, on January 1, 2020 by Under Armour COO Patrik Frisk.

As with most successful entrepreneurs, Kevin Plank took a risk on an idea, an idea born from sweating too much. He hustled, he never gave up but most importantly he 100% believed in his dream and his product, all while keeping true to himself and his philosophy. The story of the meteoric rise of Under Armour truly puts the sweat in the famous Colin Powel saying “A dream doesn’t become reality through magic; it takes sweat, determination and hard work.”

*Interview Excerpts Taken from Inc.com “How I Did It: Kevin Plank” https://www.inc.com/magazine/20031201/howididit.html

Interesting Facts

1

Before Under Armour Plank had a flower business, parked cars, and “grew a shaggy beard, and sold T-shirts and bracelets at Grateful Dead concerts.”

2

Plank started Under Armour selling stock out of the basement of his grandmother’s house where he also lived.

3

In 2014, after Nike, Under Armour became the second-largest sports-apparel brand in the U.S. By 2030, analysts believe, it will be the third-largest sportswear brand in the world.