Thomas Heath / The Washington Post

BALTIMORE — It is late afternoon on a Friday in September, and Kevin Plank is standing on the edge of the Auburn University football team’s practice field, surrounded by top executives from Under Armour, the sports clothing and footwear company he invented.

While the players drill for the next day’s game against Mississippi State, Plank watches them intently. The Under Armour chairman is in his element when he is close to football, the game he worships and the profession that defines his business. He pounds away on his cell phone, sending text messages and photos from the practice field back to headquarters in Baltimore. He has spotted a big problem with the Auburn team’s practice shorts: The UA logo is at the top by the hip, obscured by the oversized shirts the players wear untucked.

“You can NOT see any logo — I would move it to the bottom in the future!” he types. Then: “Let’s get out to see this stuff!”

Such intensity is how the 37-year-old Plank built a worldwide business with 2,700 employees and revenue approaching $1 billion. It is why he constantly flies around the world to sporting events. It’s why he develops new products, finds sports celebrities to promote them and seeks a bigger audience to buy them — from Europe to China. It’s also why he pays universities such as Auburn to feature his products, the schools serving as both laboratory and showcase for Under Armour.

Plank works endlessly to give Under Armour an edge, and his deals to outfit university sports teams are a crucial part of his battle to win customers from the established big guys. Think Adidas, Reebok and Nike — especially Nike, which outfits more than 100 colleges, compared with Under Armour’s 50 or so.

“You need to put your hands around the throat of your business, and you need to run it,” he told a group of Auburn students earlier that day. “There’s no other way.”

Plank knows he needs to create wealth for shareholders, himself included, and keep Wall Street confident that Under Armour has a future as a successful stand-alone business. If he doesn’t, it could become a takeover target, pressuring Plank to sell his controlling share to a bigger rival or even a private equity firm.

“The time between $500 million and $1 billion is a weird time, a dead zone,” Plank says. He refers to eyewear-maker Oakley and sports apparel firm Nautica — both were gobbled up by bigger companies, although both brands still exist. “It’s the Bermuda Triangle of apparel companies. Companies get caught ...”

He’s determined that’s not going to happen to Under Armour.

Entrepreneurial gene

Plank grew up in Kensington, Md., where his mother was the mayor and his father was a developer. He was the youngest of five brothers, a self-starter who showed up at neighborhood doors with a shovel or rake in the hope of making a few bucks.

“You kind of have that bug,” he says.

He was born with the entrepreneurial gene, not the academic one. Being thrown out of prep school in his sophomore year for academic reasons, he says, was one of his first breaks. He was recruited to play football by St. John’s College High School in Washington, where he fell in with players such as Chris Harrison and Jay Williams, who later preached the Under Armour gospel in NFL locker rooms.

From grammar school through the University of Maryland, Plank always hustled. He parked cars, sold T-shirts and bracelets at Grateful Dead concerts, pumped beer at the Kemper Open golf tournament and made thousands of dollars running a campus flower delivery business at U-Md.

Plank also dreamed of opening a chain of crab cake restaurants. Instead, he pursued an idea for a novel shirt that he thought would make him and his friends better football players. A walk-on who played on the field goal, punting and kicking teams for Maryland, Plank decided that traditional cotton T-shirts soaked up too much sweat. He started hunting for material that would wick the sweat from his body to make him lighter and faster.

When he found what he thought would work at a Minnesota Fabrics store, he carried the microfiber cloth to a tailor, held up a T-shirt and the material, and asked, “Can you make one of these from this?”

Seven prototypes and $450 later, he had what he wanted: a body-hugging shirt that wicked away sweat so a football player didn’t need to change shirts every quarter. With $17,000 from his campus flower business, he started his company, ordering 500 shirts. It was 1995, and Plank was 23.

From a rowhouse in Georgetown owned by his grandmother, Plank marketed his shirts as the go-to garment for the young crowd. Word about the gear started trickling out. The Atlanta Falcons called for some shirts. So did the New York Giants.

The merchandise was picked up by sports apparel catalogs such as Eastbay. Revenue began to grow, from $17,000 in 1996 to $100,000 in 1997 and then to $1.3 million in 1999. Players on school and professional teams with contracts with Nike or other rivals began demanding Under Armour clothing.

In Nike’s cross hairs

A turning point came in late 1999, when Under Armour placed a $25,000 half-page advertisement in ESPN magazine showing a sweaty, rippled Rasheed Simmons, a photogenic former teammate of Plank’s at Maryland who became the first face of Under Armour. Plank said it spurred $1 million in direct sales the next year, “one of those pivotal moments that made the company.”

Athletes and teams were starting to buy. Now was the time to go after the general public, to make the brand cool enough to compete with the giants.

Under Armour pays well over $1 million a year — over several years — for the right to outfit the South Carolina football team. Nike does the same for the University of Florida and many other schools.

The idea of taking market share from Beaverton-based Nike, as well as the other “big guys,” is still a street fight. But even with some flubs, several analysts agree that the lucrative U.S. sports apparel/footwear market is inexorably becoming a duel between Nike and Under Armour.

“I don’t know anyone who has stayed in Nike’s cross hairs and lived to tell about it, and Nike has had UA in its cross hairs for the past four to five years,” says John Horan, who publishes Sporting Goods Intelligence, an industry newsletter.

Steve Battista, a senior vice president, recounts how they turned Under Armour from a cash-starved brand into a legitimate Nike rival.

“We had skintight shorts and a shirt that made you look like a superhero,” Battista says. “You take a best athlete wearing a second-skin garment that looks like he just stepped out of a comic book, and that trickles down to the kid playing Pop Warner football.”

Plank’s timing was perfect. Under Armour’s young, rebellious generation wanted to set itself apart from its fathers and mothers, who grew up with Nike and Reebok. To keep the brand authentic, Under Armour started by selling its products only at independent sporting goods stores and chains such as Dick’s and Modell’s, where discriminating athletes shopped.

“Kevin sold a shirt to kids who played football and baseball and were very conservative,” says Mike Jacobsen, editor of Team Insight, a New York-based sports industry trade magazine. “But by wearing Under Armour, the kids could be rebellious within the traditional team sports.”

As much as Plank tries to set himself apart from Nike, he also has pulled a lesson or two from his foe’s playbook, such as signing star athletes. Downhill skier Lindsey Vonn will wear Under Armour at the Winter Olympics in February, and Milwaukee Bucks rookie star Brandon Jennings is wearing the company’s basketball shoe this season.

Huge stakes

Plank must now work on firing up his nascent footwear business, which generates less than 12 percent of current revenue, and go head to head with Nike, Adidas, New Balance and other players in the $31 billion international branded athletic footwear market. The stakes are huge; Nike has an estimated 35 percent of the market, followed by Adidas at 22 percent and Puma with just under 7 percent. If UA can grab 3 percent of the world’s athletic footwear market, company-wide revenue would double.

“He has to start picking fights with the big boys on their turf,” says Horan, of Sporting Goods Intelligence.

Under Armour has made mistakes in pursuit of that 3 percent — a rushed football cleat in 2006, a dud in the highly competitive running shoe market in 2009 — but analysts say that now the company is getting it right. It has hired a slew of executives, including veterans from past shoe and apparel wars. Apparel sales for women, men and youth grew by double digits in the second quarter of 2009.

The key to overtaking Nike is through innovation, and many industry experts predict that Under Armour can get there.

“If you asked me who could be equal to Nike in the future, the only company I can think about is Under Armour,” says Sonny Vaccaro, who helped Nike build its empire by putting its basketball shoes on celebrities such as Michael Jordan.

Plank still owns 25 percent of Under Armour shares, which makes him worth at least $350 million. He also controls 77 percent of the company’s voting shares, which means he probably doesn’t have to sell the company unless he wants to.

Asked if he has received any offers to sell, Plank says only that “it’s no secret there is a great deal of interest in this company.” But he says later that he isn’t going anywhere. He wants to keep building the brand.

“Why sell (the company) to some weenie and watch them take it apart? Then we have to ask someone, ‘Can we leave now?’ No way.”

Things are looking up

Many signs are pointing upward for Under Armour. Although its college programs did not finish among the top 10 schools in the 2009 football season, the company is expanding its university presence, including a recent six-year, multimillion-dollar endorsement deal with Boston College. The company also hopes to make a splash at next month’s Winter Olympics. Along with Vonn and the bobsled teams, its stable of athletes runs from U.S. snowboarder Lindsey Jacobellis to Swedish, U.S. and Canadian hockey players, to Canadian skiers and to the U.S. men’s and women’s freestyle ski teams.

But the business world is fraught with as many uncertainties as competitive sports. The retail culture can be fickle, a product might not measure up, another upstart could jump in the game. But Plank’s passionate drive keeps him ever vigilant.

“We still have plenty of opportunities to screw things up.”

Showdown in South Carolina

Steve Battista, 35, stands on the sideline as South Carolina prepares to take on heavily favored University of Florida. The November 2009 game, in front of 79,297 fans at the Gamecocks’ Williams-Brice Stadium and televised nationally on CBS, was important. South Carolina is an Under Armour school. Florida wears the Nike swoosh.

“This is why you do the deal, to be on the field with the No. 1 team in the country,” says Battista, Under Armour senior vice president of brand.

The Under Armour family roots for its teams, and leading the cheering is founder Kevin Plank, pacing the sideline a few feet away.

The purpose of the gathering is to play a college football game, but the back story is a marketing showdown, UA vs. archrival Nike, based in Beaverton. The more UA teams win, the farther they advance, the more television exposure they get, the bigger bang Plank gets for his sponsorship dollar.

The game starts, and Florida scores a quick touchdown. A rout may be under way, but South Carolina drives 84 yards in 14 plays to tie the score at 7 all. Florida leads 17-14 at halftime, a moral victory so far for South Carolina. The Under Armour contingent is clearly pleased.

As the third quarter rolls forward, the Under Armour staff takes heart that its team is playing Florida tough.

Battista becomes focused on the South Carolina-Florida game. It’s dark now, and South Carolina, down 17-14, is mounting an impressive drive. The entire South Carolina sideline is silent and psyched. But when Florida intercepts a South Carolina pass and scores a minute later, the Under Armour team sags. Then it heads for the SUV and the airport.

Nike, at least on the field, has won the day.

— The Washington Post

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