Dive Brief:
- Under Armour said it is eliminating about 600 jobs mostly in its corporate workforce, according to a regulatory filing.
- The move follows a decision by the athleticwear brand's board to expand a restructuring initiative that began earlier this year.
- The retailer also expects to take on $70 million of facility and lease termination costs as part of the restructuring, and a $291 million impairment related to its New York City flagship.
Dive Insight:
Under Armour's latest restructuring moves follow a period that saw its revenue down 41% because of pandemic disruption. The company also posted $170 million operating loss and a $183 million net loss in its most recent period.
In late July, the company signaled that it was refocusing around rebuilding the Under Armour brand, evolving its operating model, prioritizing DTC sales and improving profitability and "reconstructing our ability to drive sustainable shareholder value," CEO Patrik Frisk said on a conference call at the time. Going forward, executives warned of heavy discounting to come in the space.
Under Armour's losses precede the COVID-19 era, prompting its efforts, initially announced in April, to revamp its finances and cut costs.
At the outset of 2020, Frisk, who replaced Kevin Plank as CEO, reaffirmed the company's commitment to performance apparel and establishing itself as a premium player in the category.
"We are centered in athletic performance," Frisk said on Under Armour's first quarter earnings call, according to an Under Armour transcript. "There's no change to this purpose, and now, even more clearly, as the world continues to persevere through these challenging times, health, fitness, and wellness are even more center stage."
Others have noted similar trends. In May, the NPD Group put out a report detailing increases in sport and home fitness equipment, though that report pointed to growing sales of yoga mats, basketball hoops and free weights, not performance apparel and footwear specifically.
