A decade ago, Kevin Plank transcended the title of Under Armour CEO to become something else: Baltimore’s billionaire, visionary philanthropist. A Steve Jobs in a sweat-wicking T-shirt.
Forbes ranked him among the richest Americans. The first bottles of his Sagamore whiskey landed on shelves. His swanky Fells Point hotel was set to open. And in September 2016, he persuaded city leaders to approve $660 million in public financing to transform an industrial peninsula in South Baltimore into his glittering company town.
His empire appeared prosperous and secure, but Rome was burning.
The next decade brought a collapse just as stunning. Once a budding rival to Nike, Under Armour’s sales stalled and its stock plummeted. Forbes figures the 53-year-old Plank has lost two-thirds of his net worth. The company fended off allegations of fraud. He stepped aside as CEO.
In his return to the helm of Under Armour in April 2024, he promised to focus on the company. He’d already sold most of his whiskey company, and this year he got out of the hotel business. Now he’s hawking his horse farm.
The full extent of the wreckage came into focus last week: Plank is walking away from his ambitions of skyscrapers on the Patapsco, a dream inspired by a trip to Dubai. He led the initial buildout of Baltimore Peninsula, but he won’t be involved in further development.
Plank has spent the past 18 months trimming Under Armour’s workforce, slashing production and focusing on innovative, premium goods in an effort to rediscover its identity.
It’s been a rocky year, though. The company battled tariffs and its stock price slipped below $5. Last month, the brand and its most recognizable athlete, basketball star Stephen Curry, parted ways.
Next year, though, presents a pivotal moment for one of Baltimore’s most important companies.
Plank and Under Armour declined multiple interview requests for this story. But in company earnings calls, he insists there’s an Under Armour comeback story yet. Some analysts do, too.
Baltimore can only hope so. The company’s new headquarters on the peninsula was expected to anchor the largest public financing project in city history.
A stunning rise — and fall
Last year, Under Armour paid $434 million to settle a class-action lawsuit alleging the company had defrauded shareholders. The lawsuit went on for seven years, and the case file includes hundreds of thousands of company documents: emails, meeting notes and depositions of Under Armour executives during the critical years of 2015 and 2016.
Within Under Armour, some leaders had warned that they were damaging the brand in the long term in their haste to prop up sales. The case helps explain how a company that was a darling of Wall Street fell into such a deep hole.
The Cinderella sportswear company rode an intoxicating wave of success into 2016, on its way to 26 consecutive quarters with revenue growth of at least 20%.
Investors had bought into Plank’s chutzpah. A walk-on football player turned special teams captain at the University of Maryland, Plank founded Under Armour in 1996, selling his innovative sweat-wicking T-shirts from the trunk of his car.
Sales grew from $17,000 that first year to more than $50 million in the early 2000s. By then, Plank had about 175 people working for him in the company’s Tide Point headquarters in Locust Point. Still, Nike was making $10 billion annually and Reebok $3 billion around that time.
Under Armour was a growth company, Plank liked to say. Indeed, within another decade, the upstart in Baltimore had overtaken Adidas to become the No. 2 sportswear brand in the U.S. by sales. Even vaunted Nike seemed within reach.
By 2016, however, reality struck. A Morgan Stanley report downgraded Under Armour stock. Sales were falling at sporting goods stores. And one of the biggest customers, Sports Authority, was headed into bankruptcy. Maybe the company wasn’t destined to become the top sports brand on the planet.
Plank dismissed such “loser talk,” according to the court records.
Executives turned to increasingly desperate measures to prop up sales and continue the ride. They dumped merchandise at discount retailers and liquidators, such as Costco stores in Mexico, according to the shareholders lawsuit.
Within the company, some executives worried that they were causing harm, even irreparable damage, to the brand. Would customers ever pay $55 for a UA hoodie again?
“Many people in the company were obsessed with pleasing Kevin,” Chief Financial Officer Chip Molloy told attorneys in a deposition. “And Kevin’s desire was 20% revenue growth.”
A former Navy fighter pilot, Molloy was just a few months into the job during the summer of 2016 when he emailed a co-worker with his frustrations.
“Sorry if I sound a bit annoyed. Not annoyed with finance folks. More struggling with this culture of fear that is causing us to provide plans that are essentially impossible to achieve,” he wrote.
Worse yet to investors, the company was quietly pulling future sales into earlier quarters to hit their marks. They would offer stores steep discounts to take the merchandise early. In some quarters, these “pull forwards” accounted for as much as one-third or more of all sales, according to court records. The famous streak carried on through 2016, but the company was mortgaging its future.
“Personally, I’d rather see a good Q4 and good Q1 instead of a great Q4 and a poor Q1. I really don’t understand this logic,” Jason LaRose, a senior vice president, wrote to another executive.
By that December, Under Armour executives were staring at a sales gap in the tens of millions to end the year, according to court records. Molloy submitted his resignation. Co-founder Kip Fulks called into question whether the company should continue pull forwards, which he labeled a “shell game,” according to court records. The leaders met and hashed out a plan.
“If we’re going to miss, we’re going to miss gloriously,” Plank told them, according to meeting notes in court records. “But we’re not going to take from next year. To save what, a burning house?”
Under Armour missed big on its growth target, stunning investors. The storybook streak was over. The stock price plunged 26%, its biggest one-day decline. Plank described the painful moment bluntly as “taking the pull forward needle out of our arm,” according to court records.
Fulks declined to comment for this story. Molloy and LaRose could not be reached.
Within months, the Securities and Exchange Commission was requesting documents from Under Armour as part of an investigation into the company’s accounting practices. The investigation remained a secret for more than two years. Then, in October 2019, came the surprise announcement that Plank was stepping down as CEO.
Less than two weeks later, The Wall Street Journal broke the news that the Justice Department and the SEC were investigating Under Armour’s accounting practices, particularly the use of pull forwards. The company’s stock fell further.
The Securities and Exchange Commission charged Under Armour with fraud and accused the company of misleading investors. The company had pulled forward more than $400 million worth of orders across a year and a half, investigators reported. At issue was not the pull forwards, but the company’s alleged actions to hide the moves from investors.
In 2021, Under Armour paid $9 million to settle the case and admitted no wrongdoing. The company’s $434 million shareholders settlement last year ranks among the 50 largest settlements to a securities case in U.S. history. Under Armour again admitted no wrongdoing.
Plank had enjoyed singular control of the company, but the settlement put a check on his power. He could not serve as both CEO and board chairman for at least three years.
“There was no thought that anything we were doing was not transparent or being completely clear on what our reported revenue was,” Plank told attorneys in his deposition.
Plank’s Baltimore
As Under Armour was scrambling internally in 2016, Plank’s development company, Sagamore Ventures, pursued huge public support in the form of tax-increment-financing, or TIF. He wanted to build a booming waterfront mini-city around a sprawling company headquarters.
The City Council voted 12-1 to approve the deal.
“Under Armour is No. 2, next to Nike. We don’t want Under Armour to move out of the city,” City Council President Bernard C. “Jack” Young said at the time, according to The Baltimore Sun.
Plank and Under Armour have long invested in youth sports and city schools. And Plank began expanding his Maryland portfolio.
He bought the 500-acre horse farm in Baltimore County once owned by a Vanderbilt. Created a whiskey brand and built a distillery. Invested in a dilapidated Fells Point pier, turning it into a luxury hotel. He even acquired Baltimore’s water taxi service.
The peninsula, a former South Baltimore rail yard known as Port Covington, was to be his signature project — blending his ambitions for Under Armour and for Baltimore.
Around 2011, Plank and Marc Weller, a childhood friend and Maryland-based developer, partnered on the vision. Plank imagined it as a more affordable alternative to Silicon Valley and New York City.
Others joined in, including New York investment bank Goldman Sachs. Weller left the project in 2022, and Plank brought in New York-based MAG Partners and San Francisco-based MacFarlane Partners.
The development attracted some of the most generous financial incentives ever seen for a Baltimore-based project, including federal designation as an “Opportunity Zone,” and the largest development bonds package in city history.
But by 2021, with Under Armour in recovery mode and the fallout from the pandemic affecting businesses worldwide, lavish plans for its headquarters there were downsized.
Plank once envisioned 10,000 Under Armour employees working across a series of skyscrapers. That scaled-back headquarters opened last year with about 1,500 employees.
Baltimore Peninsula, being developed separately, secured a series of high-profile tenants and almost fully leased out its residential buildings, but much of the retail and office space remained empty and unleased.
While the reality has not met Plank’s ambitious dream, he led the development of a new waterfront neighborhood on what was otherwise an industrial wasteland.
“Kevin Plank’s been a blessing to Maryland, Baltimore, everything,” John Black, executive vice president at the commercial real estate services firm Lee & Associates said early last week. “But he’s got problems here.”
That proved true when, on Wednesday, Sagamore Ventures announced that it and Goldman Sachs would be exiting future development. Arkansas-based Bank OZK, the project’'s main lender, will take possession of some 100 acres of undeveloped land, according to representatives of Sagamore and Goldman Sachs. The bank has not responded to requests for comment.
“Baltimore Peninsula is becoming a dynamic, connected community that adds real momentum to South Baltimore and serves as a source of pride for Under Armour and the city,” Plank said in a statement.
He’s focused, he said, on leading Under Armour’s comeback.
‘Inflection Point Coming’
Plank returned as Under Armour CEO last year equipped with a plan.
The company had tried a couple of other CEOs — its own chief operating officer and then a Marriott veteran — but it continued to decline during the half-decade that Plank was out of the head chair. Its brand had cheapened and the recent revolving door of executives had clouded its focus, Plank said last year.
He outlined a vision of addition by subtraction, personally and at UA: Under Armour would cut back 25% of its inventory, decreasing its sale of bargain items but scaling up its “better and best offerings.”
Plank opened his first earnings call back as CEO with a pledge to the company.
“I am bringing a clear sense of purpose and 100% commitment with zero distraction from making UA excellent,” he said in May 2024.
His Under Armour game plan required 18 months, he said during that call. He has talked about prioritizing “fabrics we can be famous for” and raising “the bar on design, working to bring innovation and style back to the center of what we do.”
That moment has arrived.
“Fall-Winter 2025 is when it all starts to show,” he told analysts last month.
After years of regularly being profitable, Under Armour lost $200 million last year and is expected to operate at a loss, though a smaller one, this fiscal year, too. The company reported in federal filings this year that it has about 600 fewer employees, representing a 4% cut, than it did the year prior.
Cuts and losses are expected during a comeback, but investors don’t seem to have much confidence.
Under Armour’s stock is trading around $4.50, about half of a year ago and one-tenth of its high last decade.
“You can see where the stock price is,” said David Swartz, a Morningstar analyst. “There’s a reason why it is where it is. People have no real confidence in this turnaround.”
Tariffs instituted by President Donald Trump have clobbered the company, which imports the vast majority of its products, and an increasingly saturated market with upstart companies has complicated operations for all established sportswear brands.
Even Nike, the industry’s perpetual giant, has seen a revenue decline.
Some analysts have cautioned against Under Armour’s future. Others, however, say that reports of the $5 billion company’s death are greatly exaggerated.
Companies do bounce back. Adidas’s value took a dive in 2022, but has begun to turn around. Plank has characterized Under Armour as an underdog — scrapping and clawing against the competition.
Swartz said Under Armour is unlikely to ever return to its “heyday” and speaks skeptically of the company’s future. Yet even he considers the share price to be undervalued.
“If they were overly praised on the way up,” said Simeon Siegel, an analyst at Guggenheim Partners, “I think they’re being unfairly chastised on the way down.”
Jay Sole, a UBS analyst who has long covered the company, said he is “bullish” on the company’s future. Much of that is rooted in Under Armour’s strong brand name, he wrote in an optimistic November report entitled, “Inflection Point Coming.”
“People can spend hundreds of millions of dollars trying to market a new brand and not be able to achieve what Under Armour has,” he said. “It’s a special brand name.”
Plank is significantly incentivized to right the ship, with a compensation package that hinges on company performance. He owns more than 50 million shares of Under Armour stock. And although he took home less than $2 million last year in cash, he’ll receive a huge payout if he’s able to triple the stock price in the coming years.
Meanwhile, Plank has continued to liquidate his assets, following sales in recent years of a Georgetown mansion and Utah condo — both at significant price cuts. And in May, Plank used a different Georgetown home as collateral on a $15 million loan. Property records did not disclose its terms or purpose, or the identity of the lender.
Under Armour is uniquely visible in Baltimore. Its glowing headquarters sign can be seen from highways and its logo adorns shirts all over the city.
Through its Project Rampart initiative, it has renovated high school gyms and given uniforms to over 9,000 student-athletes in Baltimore high schools.
Gov. Wes Moore was a board member from 2020-2022.
“Kevin has been a great ambassador for Baltimore,” Baltimore Mayor Brandon Scott said in a statement, “investing time and resources into our city that we would hope all companies and leaders could.”
As part of a company volunteer day in September, Plank stood with Curry and Scott as he unveiled a weight room the company built for a Baltimore high school.
“This brand is proud of being in this city,” Plank said.
Comments
Welcome to The Banner's subscriber-only commenting community. Please review our community guidelines.