UNDER ARMOUR Apparel maker feels no pressure

The sports gear company finds itself bumping up against Nike and Reebok.
WASHINGTON POST
In 1995, when Kevin Plank finally got tired of his sopping wet T-shirt, he walked off the University of Maryland football field and into a capitalist fairy tale.
Plank, 31, founder and chief executive of Baltimore-based Under Armour Performance Apparel, was used to fairy tales working out for him.
In college he tried out for the Terrapin football team as a walk-on and eventually rose to special-teams captain. After eight teammates were hospitalized with heat exhaustion one summer, Plank decided the cotton shirts they wore under their pads were part of the problem. The clothing absorbed too much sweat and weighed players down. The Lycra compression shorts he wore, on the other hand, wicked moisture away and decreased his fatigue by supporting his muscles.
But Plank couldn't find any shirts made of similar material. So in 1996, with graduation nearing, the business major purchased lingerie material and tailored it into athletic undershirts. He handed the clothing out to teammates who gave it high praise, and from there was born Under Armour, a company that projects apparel sales of about $110 million this year.
But real life is creeping up on the company. Nike and Reebok are edging into compression apparel, and Under Armour may find itself prey to a competitive spiral that often plagues upstart sporting-good companies.
"This company has an amazing story," said John Horan, a sports-industry analyst and the publisher of Sporting Goods Intelligence. "They sell the story well and have great products. But they're getting big enough now to attract the attention of companies who know how to compete."
History
After graduating, Plank produced 500 of his shirts and sold them out of his car. He moved into the basement of a Washington home he inherited from his grandmother, maxed out five credit cards for $40,000 in start-up funds and sold 200 shirts at $12 apiece to the Georgia Tech football team.
In 1996, the company booked $17,000 in sales. Through a network of National Football League players Plank met in high school and college, he got his shirts onto professional athletes. When the Green Bay Packers and New England Patriots made it to the 1997 Super Bowl, players on both teams showed off their Under Armour on national television.
Today, the company has 235 employees and sells its nine lines of clothing in 4,500 stores. Customers include 101 major college football teams, players from 28 NFL teams and thousands of high school and teenage athletes. The company is an official supplier to Major League Baseball, the National Hockey League, Major League Soccer and the U.S. Ski Team.
Growth
The compression-apparel market, which has grown 60 percent in the past year to $130 million, was essentially created by Under Armour, said Neil Schwartz of the market research firm SportScanInfo. The firm's tight-fitting, moisture-wicking clothing expanded beyond specialty items aimed primarily at bicyclists. Under Armour claims 80 percent of the total compression market, compared with Nike's 3.5 percent and Reebok's 1.1 percent. But Nike had total sales last year of $10 billion and Reebok sales of $3 billion.
Under Armour, which holds no patent for the fabric it uses and says it considers the $5 cotton T-shirt the true competitor of its $25 technical attire, may find similar competition emerging. Quality influences 76 percent of consumers' decisions on sports attire, said Mike May, a spokesman for the Sporting Goods Manufacturers Association. Both Reebok and Nike trumpet the technical abilities of their competing products as evidence of superiority.
Unfazed
Plank appears unfazed by the potential competition, remaining confident the company has the financial wherewithal to continue growing.
Under Armour has experienced "near amazing growth in the past three years," Plank said. Most of it was funded by Plank's relatives and Small Business Administration loans. The company is owned by Plank, his mother, five brothers and two partners, both employees of the company.
Under Armour manufactures about half its gear in Mexico, as well as Honduras and other Caribbean countries. It produces the other half in Baltimore, where wages are higher but production is faster. Plank estimates the company can bring a new product to market in about six months.