By Barry Janoff
July 26, 2016: The 53,000 sq. ft. retail space in the General Motors Building at the corner of Fifth Avenue and 58th, which has been vacant for the past year, will by 2018 or 2019 have a new permanent high-profile occupant.
Under Armour, based in Baltimore, said it would move into the location previously occupied by upscale toy retailer FAO Schwarz for 55 years before brand owner Toys R Us closed the store in July 2015.
Kevin Plank, Under Armour founder and CEO, said the company would use what he called "landmark retail space" to build the brand, increase sales and "tell the Under Armour story."
"It is a great platform for the brand," Plank said today (July 26) during a conference call with investors and media. "(This could be) the single greatest retail store in the world.
"Being there, at the mouth of Central Park, on the opening of Fifth Avenue, we think it's a great platform for the brand," said Plank. "We're really going to be able to define ourselves as the company we expect to be."
UA also has a New York location SoHo in lower Manhattan, as well as corporate offices in New York. Under Armour sees it as mirroring and also surpassing the flagship store (pictured above) located near its campus in Baltimore.
The former FAO Schwarz site was being considered by Nike as a relocation for its Niketown, located nearby on 57th street, when the lease there expires next year, according to industry analysts.
Plank also revealed that Under Armour would be taking its products into Kohl's next year, initially in 600 locations before expanding to all locations, about 1,100 nationwide.
The move into Kohl's would surpass the distribution Under Armour said it currently has in about 650 Dick's Sporting Goods.
The expansion news came as Under Armour had to cut its full-year revenue forecast from $5 billion to about $4.93 billion as a direct result of national retailer and Under Armour distributor Sports Authority declaring bankruptcy and then moving to shut down all its locations.
Plank said the move into Kohl's was a big opportunity to reach women consumers.
"Kohl's has a large and loyal customer base, the majority of which are women shoppers," Plank said during the call. "We want to reach our customers where they expect to find Under Armour products."
In connection with that, Plank said that Under Armour's women's business could hit $1 billion this year.
Under Armour also plans to unveil a sportswear collection, UAS, to hit high-end stores in September.
“UAS will bring a young, fresh and modern voice to sportswear and reflects the insights we’ve gained in the performance brand now applied to the everyday wardrobe,” Plank said. “We think there is a massive opportunity.”
The company said net revenues rose 28% to $1 billion during Q2 but that net income dropped 58% to $6.34 million (from $14.8 million in Q2 2015) mainly due to a $23 million "impairment charge" because of the Sports Authority situation.
"Kohl's has a large and loyal customer base, the majority of which are women. We want to reach our customers where they expect to find Under Armour products."
Within product categories, footwear net revenues increased 58% to $243 million from $154 million in the prior year's period, "primarily reflecting the continued success of the basketball category led by the Stephen Curry signature basketball line" as well as growth in running and cleated categories, according to Under Armour.
"The Stephen Curry signature line has continued to drive strong momentum for the brand," said Plank during the conference call.
Even the Chef Curry shoe, which was widely panned due to its clinical look, has been a big seller, according to the company.
Under Armour's roster of athletes also includes Andy Murray, Michael Phelps, Tom Brady, Cam Newton, Jordan Spieth, Clayton Kershaw, Buster Posey, Bryce Harper, Eric Hosmer, Lindsey Vonn, Breianna Cope, Sloane Stephens, Kelley O'Hara, Dwayne "The Rock" Johnson and Misty Copeland, principal ballerina with the American Ballet Theatre.
Apparel net revenues increased 19% to $613 million compared with $515 million in the same period of the prior year, led by growth in men's training, women's training and golf.
"The strong broad-based results posted this quarter highlight the continued demand for the Under Armour brand around the world," said Plank. "It also underscores the importance of diversifying our business and driving a sharper point of view with our consumers wherever they shop."
Curry Still At Head Of Line For Under Armour
Back to Home Page