Australia American giant plans assault
Under Armour CEO, founder and Forbes rich-lister Kevin Plank has told investors the international market represented the 17-year-old clothing company's biggest opportunity, with its maiden Australian store slated to open next year and the group also in talks with Rebel Sport to expand their strategic relationship.
BusinessDay can reveal Rebel is close to inking a deal with Under Armour to act as its exclusive wholesale distributor in Australia after taking over the local rights to the brand from Playcorp, a private investment vehicle owned by retail billionaire Solomon Lew.
Under the proposed deal Rebel will sell and heavily promote the brand, also working alongside the Baltimore-based Under Armour as it opens standalone retail stores.
Rebel was purchased by the ASX-listed Super Retail Group in late 2011 for $610 million and is Australia's biggest sports equipment and clothing chain. It sells a limited range of Under Armour apparel.
Rebel's management believe the Under Armour range, with its heavy emphasis on specialist merchandise and equipment for runners and joggers, will have a strong appeal to Australian shoppers, especially people heavily involved in fitness and outdoor endurance events.
Created in Mr Plank's basement in 1996, Under Armour has a cult following among its fans and is at the cutting edge of running apparel including offering clothing and footwear used for endurance events such as Tough Mudder that, along with other gruelling outdoor races, is booming in Australia.
Under Armour, which last year hit sales of $US1.8 billion, a 25 per cent increase on the previous year, has recently switched its distribution systems and is preparing to roll out a network of retail and franchise stores in key Australian cities while also working with Rebel.
It will also open in nine other countries as it strives to more than double sales in the next three years.
It marks the latest in a long line of offshore retailers and fashion brands to seek out a physical presence in the region, building upon their well-known brands and websites to also offer a bricks-and-mortar store network to eager Australian shoppers.
US homeware giant Williams-Sonoma opened its maiden store in Australia last month, and is set to open its second in Melbourne soon on the back of huge support from local shoppers for its Pottery Barn and West Elm brands.
Others retailers to flock to Australia or announcing plans to come here have included Spanish fast-fashion chain Zara, Japanese department store Uniqlo and Swedish store H&M.
British website ASOS recently nominated Australia as the largest single foreign market for the global fashion group.
Hip American fashion brand Hollister, part of retail giant Abercrombie & Fitch with yearly sales of more than $US4 billion, has confirmed it is planning an expansion into Australia.
HERE THEY COME
Foreign brands that are here or on the way:
Williams-Sonoma (US, owns Pottery Barn, West Elm)
Zara (Spanish fast fashion)
Topshop (British fashion)
Hollister (US surf and streetwear)
Abercrombie & Fitch (US fashion)
Uniqlo (Japanese department store)
H&M (Swedish department store)
Lululemon (yoga, sports gear)
Victoria's Secret (lingerie)
Sephora (cosmetics)
Frequently Asked Questions about this Article…
Under Armour plans to make Australia a key growth market by opening its maiden Australian store next year, rolling out a network of retail and franchise stores in major cities, and working with local partners such as Rebel to build brand presence.
Rebel is close to becoming Under Armour’s exclusive wholesale distributor in Australia after taking local rights from Playcorp, meaning Rebel would heavily promote and sell the brand while Under Armour opens standalone retail stores alongside that relationship.
Under Armour’s international market is described by CEO Kevin Plank as the company’s biggest opportunity — the group aims to more than double sales (targeting US$4 billion by 2016) and has already grown sales to about US$1.8 billion (a 25% increase year-on-year), so global rollouts could materially affect future revenue growth.
Super Retail Group, which bought Rebel in late 2011 for about $610 million, could benefit from increased sales and customer traffic if Rebel becomes Under Armour’s exclusive wholesale partner and promotes the brand heavily — Rebel’s management believes the range will appeal to Australian fitness and endurance shoppers.
The article highlights booming participation in endurance and outdoor events (for example, Tough Mudder) and a strong local interest in specialist running and fitness apparel — segments where Under Armour has a cult following and technical product strength.
Playcorp, a private investment vehicle owned by retail billionaire Solomon Lew, held the local rights; Rebel is reported to be close to taking over those rights as Under Armour’s exclusive wholesale distributor in Australia.
Under Armour’s expansion is part of a wider trend of global brands opening physical stores in Australia — examples cited include Williams-Sonoma (Pottery Barn, West Elm), Zara, Uniqlo, H&M, ASOS, Hollister, Abercrombie & Fitch, Lululemon, Victoria’s Secret and Sephora.
Key considerations include execution of new distribution and store rollouts, competition from other international and local retailers entering or expanding in Australia, and whether the brand can convert its niche endurance and fitness fan base into sustained retail sales in the Australian market.
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