“K.P., let’s go.”
Patrik Frisk is barking out the initials of Kevin Plank, the Under Armour founder, who is one floor up from where the two are slated to meet. He is a few minutes late.
While Plank’s hectic schedule and hard-driving management style haven’t always been embraced by those working alongside him, Frisk, a 30-year retail veteran, appears to enjoy a bit of the back-and-forth bravado.
“We have differences of opinion, sure, but we just hash it out,” said Frisk, whose sizable oakwood office is feet away from Plank’s. “It hasn’t gone down to wrestling yet, but it’s as close as it gets to that. There are times where it’s hard because he could take a lot of the changes [at Under Armour] as critique to what was before. But it’s not — it’s an evolution of what used to be.”
Frisk knows better than most executives the challenges that can come with a founder — and his highly successful legacy.
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He joined the Baltimore-based company in July 2017 after working as CEO of Aldo Group under its legendary founder, Aldo Bensadoun. But at Under Armour, Frisk said part of his job is to put plans in place to turn around the firm’s stagnant North American business. The other part is to convince Plank to acknowledge what is needed to recast the organization.
While some analysts question whether the recently unveiled strategy for it to return to its performance-driven roots will work, they readily acknowledge that Frisk is the right man for Under Armour 2.0.
“Patrik is a perfect executive for what the company needs,” said Matt Powell, senior industry adviser for sports at The NPD Group Inc. “He came in and focused on processes, workflow, product development, timelines and tightened them up. He’s finding synergies across categories and cost savings across the company.”
But Powell quickly cautioned that Under Armour could be focused on a market that is slowing in growth. He said that as the performance category has waned for the last three years, athleisure footwear is accelerating.
“If a brand is focused on performance, they are focused on a shrinking market,” he said. “I’m not saying they can’t be successful — it’s just not clear to me how they can reach the size of the company they want to be by just being a performance brand.”
While Frisk agrees that athleisure is still fueling consumer excitement, he believes performance will pay off more.
Here, the exec reveals how he’s changing things up and why he’s playing the long game.
How would you assess your progress at the company so far?
“We feel we have now turned the corner in North America in terms of understanding the current distribution we have and as we move forward, how best to segment product and drive our brand in the different channels. We are still [working] through some of the inventory hangover we have had. And it’s going to take us a little while to get out of that. But in general, what we’ve laid out in North America is the right strategy for this brand going forward. We are going to drive a lot of the footwear growth through new innovation and new platforms we are bringing to the market. We are going to do that in a thoughtful, segmented way in all of the channels of distribution we are currently in.”
What’s been the biggest challenge?
“Our business is cyclical. If you’ve been distributed in a place and you haven’t performed, you’re not going to be automatically invited into the same space, so you have to earn it back. Earning it back in our industry takes a little bit of time. That is what we are doing right now.”
How do you “earn it back,” as you say?
“You have to [do it] through more quality product, better innovation, better storytelling and also through the change-out of obsolete inventory versus premium inventory. It takes time to wash that out. In our own brand metrics, there’s some good news in terms of what’s starting to happen with the consumer. But I am also experienced enough to know that this is a long game.”
What specific steps have you taken to speed up the turnaround?
“We’ve taken down over 40 percent of our SKUs. We’ve taken down our materials — the amount of materials we use as a library to create things — by about 70 percent. We’ve cut our vendors by about 30 percent. We cut our lasts down by about 80 percent. We’ve done all these different things, and creativity [hasn’t suffered]. What’s happening now is, our people are creating better product than ever before — it’s more precisely directed at a specific section of the market, of the channel, of the geography where we need to compete and for a very specific consumer. Over time, that will pay off for us.”
Analysts have been critical of your recent plan for UA to return its focus to performance product, particularly when the lifestyle category is hot. Are they wrong?
“I don’t think the analysts are wrong at all. If you look at it short-term and immediate, yes, there is a very heavy athleisure trend right now. But just because you’re in athletic performance doesn’t mean you can’t be an athleisure brand. But that is not what our focus is going to be. It will be truly bringing authenticity to the brand through solutions that people don’t know that they need and, once they do know, they can’t live without. That has to be our story, has to be how we innovate, by solving problems for athletes. That’s where we began. That’s what we’ve got to do. And then we are going to make that product look very good. Some people will choose that stuff for a leisure activity, too. That’s a better way to think about it from our perspective rather than to force an athleisure approach from a company whose DNA is not made for that. It wouldn’t have been authentic.”
You’re trying to push deeper into the running market. The company has started and stopped there before. What’s different this round?
“With our HOVR platform, we said we are going to be serious about getting into running. If we want to do that with shoes, and footwear is a little bit different than apparel, we need to be thoughtful not just about how we launch something both in terms of the messaging and the product but also in terms of how we allocate product, how we intend to drive demand in every channel. I don’t think Under Armour had the capacity before to go in and calibrate that.”
Switching gears, what are some of the challenges you’ve found in working for a company where the founder is still very present?
“Aldo was a wonderful experience, and I still treasure that. It was a little bit different because it was fashion. It was helpful for me to understand the speed aspect of fashion. Plus they were also a great retail family, so I learned a lot from them. But the founder mentality is very similar. Aldo was still very much engaged when I was there. Kevin is very much engaged here. I think you need to be humble in recognizing the success that’s been achieved by the founder. When the founder is still here and still active, it is very different than our competition.”
So you view it as a transformational moment?
“Yes. But the transformation we are going through is not just for the brand or the company; it is also a transformation for the founder. For a business of this size, I am grateful that when Kevin came to me, he recognized that the company was so big now that unless all those three things happened — the brand, the company and the founder were able to create the 2.0 version — we weren’t going to be able to scale going into the future. You get to these plateaus where to scale, you need to re-engineer, to reconfigure yourself to be able to take the next step. A lot of it has to do with your operating model, with your vendor base and all of these different things that mechanically enable you to scale. Working for a founder also requires patience because you have to make sure you do all those things in symbiosis. If you get out of whack with one, you have to keep the founder up to speed with the changes that are happening and help the founder get educated on it at the same time.”
How much freedom has Kevin given you to make the major decisions, or do you have to run everything by him?
“No. We are very deliberate about setting the objectives, the expectations and the timelines, and then we work towards that. Because we meet so often, if anything gets astray or changes, we’re updating each other multiple times a week. One of the great things we’ve been able to achieve over the last year and half is a much more deliberate company rhythm. We have a much stronger planning model for the company that gives us a much higher ability to predict the business and to lead the business together.”
Do you ever argue, and if so, how do you settle it?
“We just hash it out. It hasn’t gone down to wrestling yet, but it’s as close as it gets to that. There are things where it’s hard because he could take a lot of the change as critique to what was before. But it’s not — it’s an evolution of what used to be. Sometimes that takes a bit of conversation between us. One of the things that’s important in this journey is also for the company to understand that we are united in conviction. There is one voice here even though there are two people.”
What do you make of the negative Under Armour headlines, the challenged stock price or speculation about executive turnover?
“I have been in this industry a long time. Take any company in any industry that has to go through a change — not just in the company but also in the industry. You’re going to [experience] rough spots and patches. What defines the company is how you act when things get rough. I truly believe Under Armour is one of the great companies to work for.”
Many companies are addressing the lack of diversity among their executive ranks. Is Under Armour doing enough?
“Can we do better? Of course. What’s important to recognize is that we have a plan to get better. And we are working hard at it every day. Some of those things [in terms of hiring] have to do with where you are located. Sometimes it’s the job that you’re looking for. But the important thing is that we have an ambition as a company to continuously improve in that area and we have the programs in place to get there. And we will.”
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