The Patrik Frisk era is coming to an end at Under Armour.
On Tuesday, following the close of the stock market, the Baltimore-based sports brand said that Frisk, who has been chief executive officer and president for just over two years, will leave the position on June 1. He will continue to serve as an adviser through Sept. 1.
Frisk will be succeeded on an interim basis by Colin Browne, chief operating officer, while the company initiates an internal and external search for a permanent CEO. Browne joined the company in 2016 as president of global sourcing and was elevated to his current role in February 2020. Prior to that he was vice president and managing director for VF Corp. and has also worked for Li & Fung and Pentland Brands PLC over the course of his career.
“This was not a reactionary move,” Kevin Plank, Under Armour’s founder and currently executive chairman and brand chief, stressed to WWD. “There was nothing abrupt or immediate about it.”
But the decision was nonetheless made that it was time for a change.
“Under Armour has lived the life of becoming the little engine that could to experiencing hyper-growth where we added billions in sales a year,” Plank said. “We were a great brand, not a great company.”
Enter Frisk, who joined in 2017 as president and chief operating officer when the company was faltering both in terms of sales as well as with scandals ranging from strip-club visits to Securities and Exchange Commission investigations.
The Swedish-born Frisk, who had served as CEO of Aldo Group and also had experience working in the outdoor and active sports arena with a résumé that included top jobs at The North Face, Timberland and Vans, instituted a $200 million, five-year turnaround plan with a focus on bringing Under Armour back to its roots as a sports brand. He eliminated 2,500 wholesale accounts in North America, parted ways with many of the company’s long-tenured executives and doubled down on sports apparel, accessories and footwear rather than lifestyle apparel. He was named to succeed Plank as CEO at the beginning of 2020.
Results began to improve, with the company reporting net income above expectations in the fourth quarter and year in 2021. But in a transitional quarter that the company reported in early May, shares took a nosedive when results came in below estimates. Net losses for the period ended March 31 hit $59.6 million, or 13 cents a diluted share, compared with earnings of $77.8 million, or 17 cents, a year earlier.
Revenues inched up 3.5 percent to $1.3 billion from $1.26 billion a year ago. Wholesale sales grew 4 percent to $829 million as the brand’s direct-to-consumer revenues increased to $441 million. Apparel revenues increased 8 percent to $877 million while footwear slipped 4 percent to $297 million and accessories fell 18 percent to $97 million.
At the same time, the company is facing increased competition from a blazing Lululemon as well as Adidas and Puma, both of which have experienced rapid growth in North America. Lululemon in particular has benefited not only from the boom in exercise during the pandemic, but also from the new WFH and office casual era in the wake of COVID-19, which has seen its footwear and apparel become staples of everyday wear.
According to Plank, it’s now time for Under Armour to “pivot to offense.” Browne added, “This will allow us to lean into our next chapter” as the company takes the “strong foundation” that Frisk established and uses it to fuel future growth.
“During [Patrik’s] tenure, we made significant strides in advancing enterprise-wide operational excellence, and Patrik’s steadfast leadership has been crucial to strengthening our foundation and positioning the company for our next growth phase,” Plank said. “As we search for Patrik’s permanent successor, Colin’s experience as a seasoned executive in our industry and leading critical operational aspects of our business will serve Under Armour well as interim CEO.”
Although earnings in the last quarter were weak, Plank stressed that decisions are “not made on a quarterly basis,” and pointed to the fact that Frisk’s five-year plan was recently “closed out,” leading the company to look now at “growth strategies. We felt it was the right time.”
He added that his separation from the company was a mutual decision between Frisk and Under Armour.
“We’re incredibly excited by what we have in the innovation pipeline,” Browne said, adding that there’s “clearly demand for the brand.” Going forward, he believes there is “huge opportunity in Europe and Asia” as Under Armour continues to expand its reach internationally.
Plank added: “We’re not in some holding pattern until a permanent CEO is named. Colin has had the benefit of running our digital aspects and we’re going to be taking that to a higher level. We have a robust executive team and we’re excited about the future.”
Plank continued, “Under Armour is evolving to meet the needs of our athletes worldwide. As we transition, we are committed to identifying additional opportunities to drive improved returns for our shareholders and deliver for athletes, partners and teammates. There is a huge opportunity in front of us. I look forward to working closely with the board during the search process to find our next leader who will take us to new heights. In the meantime, we are moving forward and will continue to connect with athletes in exciting ways, offering them exactly what they need when they need it.”
He also said that Browne is viewed as a candidate to get the job permanently but that no one will be “anointed” to the position.
Since joining the company Browne has modernized its digital and direct-to-consumer strategies and transformed its supply chain organization, the company said.
“It has been the greatest privilege of my career to serve Under Armour athletes, customers, shareholders and teammates,” Frisk said. “I am extremely proud of what we’ve accomplished as a team. Together, we have done a tremendous amount of work to strengthen this iconic brand while significantly solidifying its operations. Colin has an intimate understanding of the Under Armour business and our industry. I have every confidence that his stewardship will allow for a seamless transition.”
Plank, who said he will continue to focus on fulfilling consumer demand and work to support Browne and the “robust executive team,” said he feels a “great sense of calm that we’re moving in the right direction.”