Kevin Plank, Under Armour CEO, spoke with Bloomberg Television’s Stephanie Ruhle this morning to discuss the company’s acquisition of the MyFitnessPal and Endomondo apps.
When asked about the Adidas strategy of signing on athletes, Plank said: “Spending more money is no strategy, right? And we’re not going to compete with our dumbest competitor either.”
When pressed on whether Adidas is Under Armour’s “dumbest” competitor, Plank said “Specifically, I don’t when mind you quoting me. I didn’t say it. But I don’t like them. No, I like them. I don’t like the other guys either but that’s my job.”
On the MyFitnessPal and Endomondo apps, Plank said: “Our goal with all these acquisitions was to sell more shirts and shoes. That is our core business. And so everything we do must come back to the core. So ultimately we think that if we can help athletes, help humans, help everyone find ways and make it easy for them to understand the information they are doing and to track their progress of how they are getting better, we think that they’re going to buy ultimately more shirts and shoes.”
On Under Armour’s competition, Plank said: “We’re not competing with Apple, we’re not competing with Samsung. Is that this is not iOS specific, it’s not Android specific. We’re with everybody.”
Highlights from Kevin Plank:
- SEES ‘ENORMOUS’ OPPORTUNITIES IN WEARABLE DEVICES
- APPS DEAL TO BOOST SPORTS APPAREL SALES
- CORE FOCUS IS ALWAYS TO SELL MORE SHIRTS, SHOES
- NOT COMPETING WITH APPLE, NOT COMPETING WITH SAMSUNG
- HALF OF REVENUE WILL BE ‘SOME DAY’ FROM OUTSIDE U.S.
Why Under Armour Is Buying Up Fitness Apps
STEPHANIE RUHLE: Kevin, almost $600 million for two apps, apps that don’t make any money yet. Are you jumping the shark, brother? What are you doing?
Under Armour CEO Kevin Plank: Well, first of all, there is an and norms opportunity in wearables in general. The energy around is something that is as big as we have seen. Coming fresh back off of CES, you just see the amount of energy and excitement around it.
But the thing we notice is that no one is a round community, the investment community. We started this journey of making these acquisitions more than a year ago with the acquisition of MapMyFitness in the December 2013. And what we learned with the leadership of Robin Thurston and our team there was that the things that we love was the community; the things that we didn’t have was we didn’t have nutrition and we didn’t have a global perspective. So by buying Endomondo, based in Copenhagen, by buying MyFitnessPal, based in San Francisco, gives us an anchor in San Francisco, gives an anchor in Europe, that pan-global view, as well as we can aggregate the largest — the world’s largest digital fitness and health community in absolutely bar none. 120 million registered users.
RUHLE: How does that translate into you selling products?
Under Armour CEO Kevin Plank: Right, so the thing we looked at is the one thing we know is that the more someone exercises, the more that they work out, the more athletic apparel, the more athletic footwear they’re going to buy. Last month alone, we had over 100 million workouts logged into one of our four applications, between MyFitnessPal, Endomondo, MapMyFitness, and UA Record, which we launched last week — last week at CES.
RUHLE: But no one is paying to log those. No one’s making money.
Under Armour CEO Kevin Plank: Look, there’s — what we want people to be understanding is that we want to drive value. So monetization, everybody says that look, there’s an advertising model these guys have in place right now. Whether that’s the right place for them to be or not, we don’t know what it is yet, so I don’t think advertising is going to be a place we’ll drive.
There’s a subscription model that is available. There is the ability for us just to push content. Last year, we had an ad with Misty Copeland and Giselle. We had 13 million YouTube views and it was extraordinary, the reaction, what it did for our women’s business. We have 122 million registered users, 72 million of which are women. The ability for us to push content in the right way to speak to the athlete, and again, the more that they exercise — and we know who is exercising, because they are voluntarily giving us this data to help to make them better, synthesize, make it easier, that is what we do.
RUHLE: Does that mean you are becoming a media/content company like what GoPro wants to do?
Under Armour CEO Kevin Plank: Our goal with all these acquisitions was to sell more shirts and shoes. That is our core business. And so everything we do must come back to the core. So ultimately we think that if we can help athletes, help humans, help everyone find ways and make it easy for them to understand the information they are doing and to track their progress of how they are getting better, we think that they’re going to buy ultimately more shirts and shoes.
RUHLE: Then are you getting out of the team sports business and into this health-wellness lifestyle?
Under Armour CEO Kevin Plank: Yes, no, I think it’s — we’re never going to depart sports. So everything we do, when we think about record, and again our (INAUDIBLE) growth driver since we went public in 2005, men’s apparel, women’s apparel, footwear, international, direct consumer. So right now it hits on all five of our growth drivers. So for men, there is a 16-year-old high school linebacker who’s measuring themself in the doorjamb of their bedroom and saying did I get an inch taller this year or not? To have quantifiable data about making that athlete better.
For women’s, as I mentioned, the 70-some odd million women that we have on the app right now. For our footwear business, there are people who log into MapMyFitness and they are tracking their footwear as to how many miles they put, the duration of the shoe they have. Our international business, we have 52 million people outside of North America that now have their first handshake with Under Armour is going to be in this digital capacity.
RUHLE: But are you changing your strategy? The last time you and I spoke you had just missed out on Kevin Durant. That was a $300 million price tag. Now you’ve spent $560. Was this a better move? Do you not want to pay for athletes anymore?
Under Armour CEO Kevin Plank: Stephanie, we’re constantly changing our strategy. We’re constantly updating what we’re doing. But we have core principles that drive the things that make us money: selling more shirts and shoes. We view this as the ability for us to sell a lot more shirts and shoes and, more importantly , to make athletes better.
There is this white space: and I got to go back to when I was a 22-year-old kid sitting there graduating from school and saying