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Dive Brief:
- In an unexpected move, Under Armour on Wednesday announced that Patrik Frisk will step down as chief executive officer and as a member of the company’s board of directors effective June 1, according to a press release.
- The company has initiated an internal and external search to identify a permanent president and CEO.
- In the interim, Chief Operating Officer Colin Browne will take over the position. Frisk will remain with the retailer as an adviser until Sept. 1.
Dive Insight:
After a little more than two years, Frisk is out as Under Armour’s CEO.
Frisk took over the chief role at the start of 2020. He joined Under Armour in 2017, where he held the position of chief operating officer prior to being named CEO.
“The CEO transition comes as a surprise as Mr. Frisk had only been in the role for roughly two and a half years and was hand-picked by Founder Kevin Plank to succeed him,” Telsey Advisor Group analysts led by Cristina Fernández, said in emailed comments. “The majority of his tenure as CEO has been during the pandemic and during 2021, Under Armour made progress in accelerating growth and expanding profitability. However, the company took a step back in 1Q22 and its operating income outlook for FY23 was worse than expected given supply chain and other cost pressures, as well as lower sales in China.”
In its most recent earnings, Under Armour said that it was working with vendors to cancel planned orders affected by supply chain delays, capacity and pandemic issues in China. However, Frisk emphasized that those planned order cancellations were related to supply issues but not demand. For the quarter, revenue was up 3% year over year to $1.3 billion, but the company reported a $46 million operating loss.
Last fall, Frisk said on a call with analysts that “the majority of our transformational work” was complete as the brand worked to execute on a turnaround strategy and regain a stronger position in the market. The company was working to exit up to 3,000 wholesale doors and move away from undifferentiated partners.
As COO Browne, who has been with the athletics retailer since 2016, modernized Under Armour’s DTC model, transformed its supply chain organization, and modernized its digital go-to-market strategy, “leading to significant margin improvement and operating efficiency,” the company said.
Browne joined the company as president of global sourcing, then moved to be chief supply chain officer and ultimately became the retailer’s COO in 2020. “Browne has been in charge of executing Frisk’s strategy and brings a ‘balanced’ and experienced operator background to the interim CEO role,” J.P.Morgan said in emailed comments.
In an interview with Retail Dive at the close of last year, Browne said the pandemic accelerated changes in Under Armour’s approach to supply chain that were already underway. The company had been working for years to reduce inventory levels and its supplier base to create, “a really tight group of core suppliers that we have deep strategic relationships with, and that we can rely on,” he said at the time.
Prior to his time with Under Armour, Browne worked with VF Corp, where he oversaw the company’s sourcing and supply organization in Asia and Africa. He has also held leadership roles at global supply chain company Li & Fung, Reebok, Bally and was CEO of Pentland Brands’ Asian business.
In a statement regarding Frisk’s departure, Under Armour founder Kevin Plank said, "During his 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. 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."
via https://www.aiupnow.com
Kaarin Vembar, Khareem Sudlow
