By SCOTT HAMILTON
Senior WriterWhen Edwin Watts Golf sought to expand its apparel offerings three years ago, vice president Bill Grigsby went with his gut instinct.
Rather than pick another apparel outfit with a long history in golf, he opted for Under Armour, a thriving sportswear company that had a greater following in impact sports and with extreme athletes. At first glance, the pairing seemed like an odd marriage, but Edwin Watts committed to Under Armour, making the retailer the first off-course chain to carry its inaugural golf line.
Grigsby’s choice has more than paid off.
Best known for its athletic garments that practically have become standard-issue for sports teams, from crew to football, Under Armour has struck a chord with golfers, too.
“It’s the fastest-growing apparel brand in the 40-year history of our company,” Grigsby says. “In three short years it has gone from zero percent of sales to one of our top-five apparel vendors, putting them up there with companies like Nike and Adidas.”
The two giants of sports apparel and footwear are Under Armour’s rivals on and off the course. But ironically, all three companies’ collective push to make performance fabrics the mainstay of golf apparel likely will aid each of their sales – and help establish Under Armour as a legitimate player in golf.
If that happens, don’t be surprised to see the Baltimore, Md.-based company rapidly expand its golf offerings. It already offers windshirts and rainsuits, and golf shoes apparently aren’t far off. (Under Armour began selling cleats for baseball and football within the past two years.)
“We recognized it was a very hot and profitable brand, with a ton of marketing on the collegiate and NFL side,” Grigsby says. “And most golfers like sports. We felt they’d recognize the brand, and we were right.”
Other retailers and analysts agree Under Armour has secured a spot for itself in the golf apparel market and has plenty of upside.
“I don’t know that they’re going to be dominant in that space, but I think there is definitely a place for them,” says Matt Powell, an analyst for SportsOne Source, a sporting goods research firm. “Under Armour speaks to a younger customer, and he’s going to grow up and play golf at some point. (And) the brand appeals to others as well, regardless of demographic.”
In the late 1990s, Under Armour burst into the team sports arena with a novel product: Form-fitting performance garments that wicked moisture away from the body. Athletes across the sports spectrum swore by it, and revenue soared from $5.3 million in 2000 to $242.2 million
in 2005, when Under Armour went public.
For its most recent fiscal year, the company reported sales of $607 million and net income of $53 million.
According to Brady Lemos, an analyst for investment research firm Morningstar, Under Armour dominates the overall sports performance apparel category with a nearly 75 percent share. Lemos, however, says that lead isn’t insurmountable, noting that Nike Inc.’s $2 billion advertising budget is 40 times greater than Under Armour’s.
But there’s little sense that Under Armour officials are looking over their shoulder. Indeed, they seem focused only on expansion opportunities.
Under Armour launched a line of football cleats in 2006 and followed it with baseball spikes last year. Its first noncleated training shoe is expected to debut in May. The company has relationships with athletes and teams in football and baseball, professionally and at the college level, and sponsors tournaments in a variety of sports, including rugby. In 2007, Under Armour opened its own retail store in Annapolis, Md., and is expected to add four locations this year, including one in Chicago.
Under Armour delved further into Nike and Adidas territory when it jumped into the golf category in 2005. According to Colin Clark, Under Armour’s brand manager, golf professionals on various tours already were wearing the company’s apparel without compensation. That was evidence enough for Under Armour to launch a golf line.
“It was a very natural evolution for our brand,” Clark says.
Under Armour’s goal, he says, is becoming “the number one performance apparel in golf.” It has expanded into other specialty stores such as Golf Galaxy, Golfsmith and PGA Tour Superstores.
In all, Under Armour now has more than 200 off-course golf accounts, including small independent shops and big-box dealers such as Dick’s Sporting Goods and The Sports Authority.
The apparel company also has enlisted Kansas-based Gear For Sports to distribute and manage the brand for Under Armour’s 70 pro-shop accounts.
Under Armour offers an array of performance golf apparel: Men’s shirts range in price from $44.99 for the Punch Polo to $74.99 for its UA Metal Polo. Other items include shorts and pants, cold weather gloves and caps, and the Cloudburst rainsuit ($159). An extensive women’s line also is available.
For critics who suggest Under Armour is expanding too quickly in golf, company officials offer a quick rebuttal.
“(We’re) not just throwing a little Under Armour logo on a golf shirt and throwing it out there,” says Chris Young, Gear for Sports’ vice president of brand management. “We’re out there fighting Nike and Adidas for shelf space. We’ve got to have the product.”
At this point, there are no specific golf marketing initiatives in the works. But any effort is expected to fall in line with Under Armour’s umbrella strategy, which deifies a breed of athletes the company calls the “new prototype” – those willing to work harder than the rest to be the very best. That means keeping the same edgy ads such as the commercial that aired during Super Bowl XLII in February. The spot – which featured nearly 30 Under Armour endorsers, including PGA Tour golfer Hunter Mahan, NFL’s Ray Lewis and Nascar driver Carl Edwards – showed an Under Armour-clad man rallying “prototype” athletes, fiercely yelling their mantra “the future is ours.”
One school of thought suggests such ads, which would be highly unconventional for golf, may scare away the sport’s traditionalists. But analysts say the game is changing and so, too, are modern golfers’ tastes for equipment and apparel.
“I think there’s a little bit of an uphill climb there,” Powell says. “But golfers, like any athletes, are looking for an edge. If an Under Armour shirt is going to give them an edge, then I think they’ll gravitate to it.”
• • •
Scott Hamilton is a
Golfweek senior writer. To reach him e-mail
shamilton@golfweek.com.
Posted: 3/24/2008
print
email
discuss
