Under Armour to Exit Up to 3,000 Wholesale Doors, Focus on D-to-C Business
Under Armour has joined a growing list of major consumer brands that are making big changes to their wholesale strategies. The athletic brand, which saw some progress in its turnaround during the third quarter, said it will begin to exit 2,000 to 3,000 stores in North America, its largest market. By the end of 2022, it expects to be in about 10,000 doors, executives said in a conference call. As it overhauls wholesale, Under Armour is also upping its focus on direct-to-consumer (D-to-C) channels, where it plans to offer fewer promotions and discounts to fuel healthier margins.
Total Retail's Take: Considering the upheaval we've seen in the brick-and-mortar arena in 2020, and its uncertain future moving into 2021, it's not surprising that leading brands such as Under Armour are taking a long, hard look at their wholesale operations. Under Armour is moving closer to the model employed by one of its chief rivals, Nike, which has been lauded for its efforts in transforming into a direct-to-consumer brand first, wholesaler second. With its new plan, Under Armour will gain more control over product distribution, enjoy higher margins, and be able to collect more first-party customer data. That last piece holds tremendous appeal for brands, particularly as we see consumers increasingly opting to shop online.