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UA Surpasses Adidas to Become the Second Largest Sports Brand in the United States
In November 2014, Under Armour made a significant mark in the U.S. sports apparel industry by surpassing Adidas to become the second-largest sportswear brand in the country, following Nike. This achievement came as a surprise, especially considering Adidas' long-standing presence and its acquisition of Reebok in 2005 for $4 billion. Despite these efforts, Adidas struggled to gain ground against Nike in its home market.
According to data from Sterne Agee and SportScanInfo, during the first eight months of 2014, Adidas saw a 23% year-over-year decline in U.S. sales, reaching $1.1 billion, while Under Armour experienced a strong 20% growth, hitting $1.2 billion. Nike, however, remained the market leader with $8.9 billion in U.S. sales during the same period.
Globally, Adidas still holds the second position after Nike, but in the U.S., it has faced challenges in competing effectively. The German brand, known for its football heritage since 1948, has been focusing on strengthening its marketing efforts in the American market. However, despite its global success, Adidas failed to make a significant impact in the U.S., where Nike dominates.
In its mid-year report, Adidas revised its 2015 sales forecast downward to 17 billion euros, and its stock dropped over 8% on that day. While Adidas has had some success in football in the U.S., the company is looking to expand into other sports such as baseball and basketball.
Under Armour, although not as established as Adidas, has shown strong performance in running apparel and has become a top-selling product in its range. The brand has rapidly expanded into footwear, particularly basketball shoes, despite limitations in its wholesale distribution network.
Founded in 1996 in Baltimore, Maryland, Under Armour started with just $17,000 in sales. By 2014, it had become one of the most talked-about brands in the consumer goods sector. In August 2014, it ranked third among the top-performing S&P 500 stocks, with a stunning 57.85% increase.
The brand was founded by Kevin Plank, a former University of Maryland football captain who was frustrated with the quality of traditional athletic wear. He developed a moisture-wicking T-shirt in his grandmother’s basement, which eventually led to the creation of Under Armour. His vision was to create performance-enhancing gear that met the needs of athletes.
Under Armour has consistently grown its net profit at a rate of over 20% for more than 10 consecutive quarters. The company focuses on innovation, introducing products like the Armour 39 digital tracking system, ColdGear Infrared technology, and Speedform running shoes. It also expanded globally, opening its first international store and investing heavily in e-commerce and mobile apps like MapMyFitness.
Nike has long dominated the market with high-profile athlete endorsements, but Under Armour has been making its own moves. It competed fiercely with Nike for the endorsement of NBA star Kevin Durant and launched a major campaign targeting the women's market, including a partnership with supermodel Gisele Bundchen and an innovative digital advertising strategy.