Both Under Armour Inc (NYSE:UAA) and Nike Inc (NYSE:NKE) choose the same day – October 22, 2019, to announce a change in top leadership. The long-term CEOs of both companies decided to step down to make way to focus on growth.
Nike under pressure with flat growth
Chief Executive Officer of Nike, Mark Parker, is stepping down in January 2020. Most of the customers prefer buying products online and putting pressure on the wholesale business of Nike. The company is investing in technology and putting in efforts to boost direct to consumer sales through online mode. Therefore, it has selected John Donahoe, a former CEO of eBay, to lead the technology innovation. Before joining Nike, Donahoe served as the Chairman at PayPal. However, several analysts are in confusion about why Nike could not choose a successor from within its ranks.
Under Armour selects Patrik Frisk as CEO
Under Armour has chosen Patrik Frisk as a successor to Kevin Plank. The company has recorded tremendous growth in the past two decades. According to Plank, the operations are not coping with the size of the business. The 30-year-old retail expert is credited with the revival of Timberland, the boot brand, in the early part of this decade. In 2017, Patrik joined Under Armour to set things right. He played a vital role in improving the operations in tune with the size of the business in the past two and a half years. However, the company is recording slowest growth in its largest market – North America.
Both Under Armour and Nike are struggling with different opportunities and challenges. Nike plans to become a vertical retailer, and this move could create jitters for some wholesale partners. Under Armour and Nike have selected CEOs from different backgrounds unrelated to their businesses. But they are expected to manage the complexities in the overseas businesses.
Small players make profits
Several small players are making handsome profits thanks to their operational efficiency. Some of the winners in this space include Inditex, LVMH, and Nike. Lead by Patrik, Under Armour, is operating excellently. However, it faces the challenge of convincing shoppers to purchase high-performance products when people prefer active casual wear.