Under Armour Inc.’s incoming chief executive officer has never hawked apparel and doesn’t emulate the brash management style of the sportswear company’s founder, but the board is betting she’s just what it needs.
(Bloomberg) — Under Armour Inc.’s incoming chief executive officer has never hawked apparel and doesn’t emulate the brash management style of the sportswear company’s founder, but the board is betting she’s just what it needs.
Stephanie Linnartz, a 54-year-old former Marriott International Inc. president, starts as Under Armour’s new CEO on Monday. Described by those that have worked with her as a polished executive, she’ll be tasked with steering the company — once a seemingly unstoppable new force in athletic apparel — out of a lull and back into growth mode.
While her background appears unconventional at first glance, it may help Under Armour address some of its weaknesses. Linnartz led a digital transformation at Marriott, oversaw its industry behemoth rewards program Bonvoy and fostered partnerships between the hotel chain and the National Football League and the NCAA. The sportswear company is in the middle of its own technological push — a pivot to sell more of its products off its own website — and overcome past missteps.
“The whole industry is moving towards online sales, app sales,” said David Swartz, an analyst at Morningstar Inc. “It’s becoming an increasingly important channel for the athletic footwear and apparel market, especially footwear. And I think Under Armour needs some help there.”
However, it will be tough for her to “change everything at once,” Swartz said.
The Baltimore-based apparel company declined to make Linnartz available for this story.
Hot Stock
Under Armour was once a hot retail stock, challenging much-larger rivals Nike Inc. and Adidas AG with a compelling selection of apparel and sports gear and driven by a hard-charging founder, Kevin Plank. But sales slowed in 2017 as it moved into new product categories, such as shoes, and analysts said the company had lost focus.
Management, under the direction of now-executive chair Plank, decided to embark on a multiyear restructuring plan that included job cuts. Under Armour shares have dropped more than 40% during the last five years, compared to a roughly 70% gain in Nike shares.
Linnartz’s mandate will be to expand the business by targeting young athletes and adding a wider breadth of off-the-field products. She’ll also need to build out Under Armour’s customer-loyalty program, which analysts have said is far behind rivals.
Read More: Under Armour CEO Exits After 2 Years With Stock in Free Fall
Marriott Loyalist
Those tasks were among the executive’s specialties during her 25 years working for Marriott, the Bethesda, Maryland-based hotel giant. Linnartz started in the hospitality business as a teenager, cleaning guest rooms at the Phoenix Park Hotel in Washington, which her parents owned, she said in an interview with Bethesda Magazine.
She started at Marriott right after obtaining her MBA from the College of William & Mary and eventually oversaw the hotel chain’s Bonvoy loyalty program, which has at least 177 million members. Bonvoy is an industry top-performer, with far more members than Hilton Worldwide Holdings Inc.’s program, with about 150 million subscribers, and InterContinental Hotels Group Plc’s program, with more than 115 million.
During her tenure she was seen as a favorite of Arne Sorenson, the hotel chain’s popular CEO who died of cancer in early 2021. Sorenson would include her on runs he sometimes took with staff.
Upon Sorenson’s death, Linnartz and another candidate, hotel development head Tony Capuano, were seen as contenders for its top job. Capuano’s role cultivating relationships with real estate investors had been a revenue engine and board members chose him as the next CEO in 2021, while Linnartz was named president.
For the past two years she kept her head down, according to Morningstar’s Dan Wasiolek. Linnartz has said she was focused on helping the chain survive the pandemic, which caused it lose 90% of its business in the early stages of the crisis.
“She has both grit and grace, and these qualities make her an exceptional leader,” Marriott’s Capuano wrote on LinkedIn when Linnartz’s appointment to Under Armour was announced in December. “Stephanie and I have rooted for each other for more than two decades as we grew in our careers at Marriott and in our lives outside the company.”
Looking Ahead
Making the switch from hospitality to sportswear could present itself as a significant adjustment for Linnartz. As she takes the helm, she is expected to have a challenging first two quarters as Under Armour and other apparel makers stare down an inventory glut that has forced markdowns that have dented results, said Cristina Fernandez, a senior research analyst with the Telsey Advisory Group.
Beyond warehouse woes, Linnartz will also take on a task set by her predecessors: resonating more with women and younger consumers – demographics that have driven success at peer companies including Lululemon Athletica Inc.
When Under Armour began looking for a new CEO, Plank said in a May 2022 interview that he wanted to hire someone with a growth mindset. In order to accomplish that, Linnartz would need to improve its product, distribution and geographic diversity, according to Morningstar’s Swartz.
The sportswear brand also lags behind its peers when it comes to global presence, with about 66% of the brands sales coming from North America in its last quarter. Analysts also see Linnartz working to strengthen the brand’s profile in Europe and China.
Given her past experience building sports partnerships for Marriott, she could also help the company win contracts with professional leagues and college teams.
Read more: Nike lands Major League Baseball jersey rights in 10-year deal
“Stephanie deeply understands brands, omnichannel and digital strategies, and is committed to meeting the needs of consumers,” Plank said on LinkedIn. “I look forward to seeing how her unique experiences and perspectives can propel UA to new heights.”
–With assistance from Patrick Clark and Kim Bhasin.
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