Under Armour
Athletic brand shedding non-viable tissue through $140-160M restructuring while repositioning toward premium survival niche.
Under Armour generated $5.7 billion revenue in fiscal 2024, down 3% as the brand retreated from mass-market competition with Nike and Adidas. The company initiated restructuring in May 2024 that will cost $140-160 million, closing the Rialto distribution center and eliminating redundant organizational tissue. CEO Kevin Plank described the strategy as "reconstituting the Under Armour brand and establishing a more premium position," biological language for autophagy followed by differentiation.
Like a sea star autophagizing damaged arms after predator attack, Under Armour digests its own wholesale infrastructure to concentrate resources on direct-to-consumer premium channels. Fiscal 2025 guidance anticipates low double-digit revenue decline with gross margin expansion of 125-150 basis points, trading volume for profitability per transaction. The company repurchased $65 million in stock through December 2024 as part of a $500 million buyback program, reallocating capital from growth to shareholder extraction during retrenchment.
The premium repositioning represents classic resource partitioning: abandoning the crowded mid-market niche where Nike's economies of scale prove lethal, climbing toward Lululemon's territory where brand mythology commands pricing power. Under Armour's North America revenue declined 14-16% in fiscal 2025 as the company deliberately pruned retail partnerships that diluted brand perception. Success requires executing autophagy faster than competition erodes remaining market position, a metabolic race against predation pressure.