Under Armour’s origin story is nearly folklore at this point: in 1996, the brand’s founder Kevin Plank invented a sweat-wicking shirt in his grandma’s basement. Over the ensuing decades, he expanded Under Armour into a five-billion-dollars-a-year business. “What an awesome American entrepreneurial story and one I’m so proud of,” he said of his own beginnings on CNBC this morning. Today, Under Armour announced that Plank is stepping down from his role as CEO in January, and handing the reins of the company he built to its current president and COO Patrik Frisk.
In an interview with Fortune, Plank said that his new position of “brand chief” will free up time and allow him to come up with products that will “blow people's minds.” In that way, it’s not hugely surprising that Plank would voluntarily (he claims) relinquish the CEO role he’s held for over two decades. Inventing a sweat-wicking shirt in grandma’s basement and running a multi-billion dollar company require two completely different skill sets. The timing might be right, too: Under Armour is experiencing the growing pains that almost all small-turned-huge corporations do. Over the past couple years, founder-CEOs at both Uber and WeWork have made way for new, more experienced leadership. When I spoke with StockX co-founder Josh Luber recently, his transition was so fresh that he started a sentence like this: “I'm a 41-year-old—well, I'm not StockX CEO anymore, but 41-year-old leader of a $1-billion company.”
Plank and Frisk, a former CEO at the footwear brand Aldo, told Fortune that while their roles are changing, the direction of the company won’t change dramatically. The fashion crowd competitors like Nike and Adidas have been—successfully—chasing over the past couple years is still not a concern to Under Armour. “It’s about making sure we are focused," Frisk said. "The brand positioning is very clear for us: we’re a performance company.” Of course, Frisk also acknowledged that people expect performance and style to come bundled in a single package today.
The ongoing battle between Under Armour, Nike, and Adidas might be the best test case we have for how much style and influence can impact a performance company’s bottom line. Whereas Nike’s top-selling shoe will never be the limited-edition designs made by those at the top of fashion houses, those collaborations arguably create a halo effect that goes a long way toward selling mainline Roshes and Tanjuns and 270s by the millions. Those collaborations help the Swoosh feel cool and desirable, no matter what particular model it’s affixed to.
Plank, though, seems to have ambitions of inverting the blueprint of other successful sneaker companies. While Nike rolls out its most ambitious technological achievements by putting shoes on fashion-week runways, Under Armour wants to let its shoes speak for themselves. In reference to the Hovr smart shoe that launched last year and has the ability to track and analyze workouts, Plank told Fortune, “I don’t think the brand has gotten enough credit yet for just how cool a product we made.”
It might also simply be the case that the Under Armour board applied Occam’s Razor here. Plank’s decision to step down comes after several years spent testing the axiom all news is good news. Plank came under fire in the early days of the Trump presidency after he came out in support of the new commander in chief. Earlier this year, The Wall Street Journal uncovered emails that seemed to show Plank taking a journalist’s advice more seriously than he was taking suggestions coming from inside his own company. (Under Armour strenuously denied this.) Under Armour was also accused of cultivating an inappropriate company culture that involved “the use of company funds for adult entertainment,” a representative for Under Armour told WSJ. Of course, all these problems were further exacerbated by the company's declining sales. In the U.S., Under Armour’s biggest market, sales went down 3 percent in the most recent fiscal quarter.
The change at CEO might not represent a huge material shift to the way the business will be run, but after years of negative reports, Plank hopes it will lead to a spiritual change. In the future, Plank told Fortune, he wants UA to be a “loud brand and a quiet company." As of Tuesday afternoon, the changes are already speaking volumes: Under Armour’s stock price is up.
Originally Appeared on GQ