Under Armour creator and CEO Vincent Bezaio is no stranger to controversy. He’s formerly spoken out against genetically modified foods and received death threats over the issue. However, in this interview, he describes some specific industries as”evil,” and suggests that entrepreneurs should have a different approach to working with the companies they work for Ferrari Energy. To put it differently, he says it is not always best to align yourself with a”good” company. In cases like this, his example includes one of the biggest names in exercise equipment.
In the course of this interview, I got to ask the tough questions – for example, why does Under Armour should get in to China? And why is the company focusing on fitness and wellness rather than more conventional sports? While he did not offer certain details, he did tell me,”We’re investing a lot in the private stock exchange. There are tons of people in our industry that have started businesses that have gone bankrupt, so there’s some danger involved.” He moved on to mention that the company’s earnings are increasing year-over-year and the business currently has two factories in China and one in India.
In light of Under Armour’s recent issues, it’s easy to assume that Bezaio was seeking to ride the co-founder’s popularity to the private sector. In reality, several entrepreneurs spoke to me about the way the founder’s prominence has helped them get a toehold in the public sector. Entrepreneur Joshua Davis explained that due to Armour’s history is really good, many large businesses have bypassed him in favor of bigger, more prestigious businesses. “VC dollars are flooding into companies which were considered too risky to put money into years ago, just because they had great founder names,” he said. Indeed, Davis went on to say that there are a range of big-name businesses he thinks are led towards bankruptcy if they don’t make changes shortly.
Still, some experts question if this is a smart move for a fitness business that is relatively late on the game. “The reality is that several big names currently have private equity groups considering their business,” states John Di Lemmepersonally, CEO of Global Fitness, a regional advertising and sales company. “It may be nice to see an innovative new health and exercise equipment firm join that fray, but I doubt it is a winning proposition.” On the other hand, Di Lemme says he sees great opportunity in the business and in the long run. He notes chief executive officer Paul Scandlen is a trained exercise expert who brings a wealth of expertise to the function.
Under Armour’s troubles could spell trouble for different companies in the gym equipment enterprise. “There is a great deal of consolidation happening in the fitness area, and companies can really benefit from consolidating and focusing on their core business,” says Jim Powers, senior vice president of Consumer Products and Marketing in CDP. “A number of these businesses have really strong brands that clients feel they understand and trust” Still, Powers cautions against placing too much stock into what Under Armour might become. “The trends are always changing.”
For now, Ounder and CEO Richard Fields is apparently managing the crisis by themselves. In a statement published after the company’s second-quarter earnings release, Fields said”The strength of our business is the result of hard labour and investment in the long term. We hope that the company will fulfill its fiscal obligations and remain a solid, growth-oriented company in the years ahead.” Whether the gym business will rebound remains to be seen.