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00:00If you could be a great athlete for you could be the CEO of a athletic apparel company. What would you rather do. I tech CEO every day of the week. I mean be good but maybe not every day of the week. Steph Curry great basketball player I think comes over your house and wants to play. Does he let you win. If I won a game against 7 could that be a problem here in the apparel business. That jacket you're wearing is actually helps increase your blood flow and helps your muscles recover faster. ALL RIGHT I'M FEELING THE BLOOD FLOWING already. Would you fix your time please. People wouldn't recognize me if my tie was fixed but it just seemed to sweet. All right I don't consider myself a journalist and nobody else to consider myself a journalist. I began to take on the life of being an interviewer even though I have a day job running a private equity firm. How do you define leadership. What is it that makes somebody tick . Thank you for sending over these my shoes. I got and thank you for this. You can come you're not wearing any. I'm a bit embarrassed I'll be honest with you. OK. And they're available on the website as well. Really. OK. Yeah. All right. All right. Well thank you very much. Very comfortable. These are gonna make me run faster as I write. They could jump a little higher run a little faster and be a lot more secure in your Emily Chang. All right let's talk about your company that you started Under Armour. You had some of the great athletes that you sponsored. Take Stephan Curry great basketball player. You pay him a fair amount of money I guess to wear your shoes. And he likes them. But if he comes over your house and wants to play horse does he let you win because you're paying him a lot of money every year. I'd be I'd be I'd be troubled that he let if he if I want to game a horse against seven curry that be a problem. What about it like you want to swim with Michael Phelps as he let you win or no. I don't know if I'd try that . What about Tom Brady. Is he throw you the balls soft. I think these guys have only one Steve. If you could be a great athlete like the ones you just mentioned or you could be the CEO of a athletic apparel company what would you rather do. Be a great athlete or be the CEO. I take the CEO every day of the week. I mean you'd be good but maybe not every day a week. But you have . Yeah I don't know it's actually that's probably the better question that I give the credit for. I mean like sports you still get hit like in sports they still write about it afterwards what happens but you really have four games a year with earnings calls and all the work is done long before the press release. That's for sure. So what year did you start Under Armour 1996 from about a mile from where we're sitting right now and a little rowhouse in Georgetown on 30th history when you started the company. Do you ever think you'd been one of the biggest athletic apparel companies in the world. I never had. I never believed we couldn't do that. Like when I started I never I never thought I don't know. People began with this massive vision that you know 22 or 23 years old. But my belief when I started was I was going to build the world's greatest t shirt for football players to wear their pads. It was very much a distance of how far we could see it from there. They said well we make the best shirt for football players and what if we made them long sleeved shirts and what if we made something for cold weather traditional warm weather. And it was really the is was one one product at a time and one asked from the consumer at a time to satisfy a need. You grew up in Kensington Maryland suburb of Washington. You decided you would you weren't going to be an academic star but you might be an athletic star. I believed I could do both but it was all right. I did what I could get at the time. You were a good football player. I was good for ise good high school football player what position did you play. I played fullback a linebacker. OK. so And you were ready to get a division one football scholarship but the division one was not ready to give you one. Correct. So you went to University Maryland but you walked onto the team. I disagreed with that assessment that yes. So I was like you sort of march and cut our own course and I went on the team and I played all four years I did. And so how many people walk on and actually play all four years is that uncommon. It's probably unusual but I think they made a mistake. I think I should have the scholarship long before. Well I thought the same thing at Duke I thought I should have gotten a football scholarship but that didn't work out so I should have walked on. Now you can qualify here that you got through. And when you graduated nobody the NFL didn't draft you I assume. I know if I had to make other plans. All right. They made a mistake. They didn't draft you so they were right. So what did you decide to do . You wanted to build a company but where was the idea that came to your head about having a let's say a t shirt that would be better for football player. I never understood why would wear a short sleeve cotton t shirt in the summer a long sleeve cotton t shirt in the winter and the way that everyone had viewed apparel in the past had been it's just another t shirt versus feeling it like a piece of equipment. I thought there was this way to create apparel to make it truly a piece of equipment that could help enhance your performance and make you better. And I sweat like a pig so I needed it. OK. All right. So how did you go about the idea of designing something or getting somebody help you design something that would do what you wanted to do. Where did you go the first places I went to a local fabric store and I brought in a really a piece of for lack of a better word as well as laundry. And I said you make anything like this at this synthetic stretchy material because it was like their girdles that we wore on the lower half of our body. So what if you made that for the upper body and the woman at the store. Minnesota fabrics in College Park she had in the a bolt of fabric and I bought what she had. I then took this stretchy synthetic fabric to a local tailor in Beltsville Maryland and I brought in a tight little white Hanes t shirt and I said Circe making as many t shirts that look like this but out of this fabric and seven prototypes later I took them back to my teammates in Richmond in the spring in 96 and they tried and they liked them and so weren't they made the equipment for. The T. So how do you how did you sell it. Where'd you go to sell it. I started with the guys and found out. Will this idea hold and the players at Maryland said that they love them. Where could they get more . And I knew I needed to learn how to manufacture it so I'd read about this place called the Garment District in New York City . I gotten my 92 Ford Explorer and drove up to Thirty fourth and fifth Avenue parked my car and found a place that could buy fabric. I found a place that can manufacture and I made them first one of 500 shirts and then sent three T-shirts out to everybody that I knew never played with. And your car was still there when you came back right. No. It was actually tough the first time it's expensive. OK all right. So you have the garment it's being manufactured and then your job is to go on the road and basically sell it to athletes more or less your team SEC was at heart. I put 48 and 51000 miles on my car in 97 and 98 respectively. And then I started working my way up to airplane tickets and things like that to move around. But I did do these great tours but that's a lot of miles. Now you are the youngest of five brothers. So did your older brothers say you're crazy. Go get a job or what do they say about this little bit of that. Not really that nice but they said it. No I mean I have done a tremendous amount of support from my family was great. And but everybody had their own thing and so I was doing my thing and Under Armour was you know it wasn't obvious . You know people started and they call and they trip over the name as you know. What's that thing you're doing. Armor All you know underarm. Where'd you get your initial money investors . Yeah I had this before private equity but I had seventeen thousand startup capital that I use. And then it was just friends and family and there were moments of selling you know a percent in the company or 5 percent of the company for five thousand dollars was whatever we could do just to get the company started. All right. So you're growing the company . What other products did you line extensions EV call and what other products did you build. We let the consumer lead us. You know our first product began as a tight fitting t shirt for four four for the summer and all of a sudden it was can you make something from warm weather can you make long sleeves. Could you make shorts and then you have this ethos for essence that becomes the brand that needs to translate through every product that we build and it comes the essence and that consistency that continuity was makes. That's what brand is kind of an athletic shoe really make me run faster. It's all relative. I'm sure I get run faster my heat lasts or whatever else but probably that's not the major factor. They won't continue. It'll just encourage you. So what about great athletes now Michael Jordan shoe became famous and everybody realized if you have an athlete endorse a shoe it can help sell a shoe but to get these athletes to do this you have to basically pay them money. Right. They don't do it for free. It's nice when they start because they love the brand because they love the product. And so you know with Jordan Spieth is a great example of an athlete who you know he wore he's an athlete he played football and baseball and basketball growing up and he loved Under Armour and that's why he wanted to sign with our brand. You know Steph Curry was you know an athlete who came to us who was he'd already signed one NBA contract with with Nike and then he made the decision to switch to Under Armour. How did he decide to pick on your armour over the others. Truth be told was actually his his three year old daughter Riley at the time who made the decision . So this is actually a pretty cool story. So Stefan when making the decision he had offers from all three brands and Stefan was you know the seventh pick in the draft and his three years had gone by and he didn't feel he was getting the love really from the brands with the time so to make the decision he put all three shoe boxes with a shoe on top issue that we had projected for him and he said you know Riley either helped make this choice. Tell me what you think and he said is that maybe she was 1 or 2 actually and she got up and sort of hobbled over there and she picked up the first shoe which is the Adidas shoe . She picked it up looked at it threw it over shoulder and she sort of waddled over to the second Nike shoe and picked it up and threw it over her shoulder and as you pick up the number she walked that said this one daddy. So do you have to pay her two or Jihye Lee might. It's not a bad idea. You are not in the athletic equipment business. Our apparel isn't just apparel that whereas because of stylish cool it should be stylish cool but makes it great. That jacket you're wearing is lined with selling it which actually helps increase your blood flow and helps your muscles recover faster to put you in better shape for tomorrow. All right. I'm feeling the blood flowing already . Yes when the children or young adults are buying athletic equipment or apparel they might be induced to do so by Michael Jordan endorsing it but for somebody my age or older people are they really going to be induced to buy something because Michael Jordan endorses it or really it does work for people like me are we targeting you. I'm not like you are saying we do we are we would not but our mission statement says to make athletes better and our ambition for doing that is when you can outfit the best in people that really care about every every ounce every nuance of a product that comes in. I think that trust is something that builds credibility that allows the inspiration because do you care. NAPOLI It's nice to know that the very best this is what they choose to wear when they're performing at the highest level. Now the products where the products made and there's a perception that all these athletic products and apparel are made let's say in Asia they're all made in the same kind of places and these people are paid very low wages and in the end the same factory makes things for you. Nike and Adidas is that true or not. I think that the the global manufacturing process is something that is it's critical to I think growing and creating you know second world and first world economies you watch what's happened in China the elevation of the minimum wage when I've made my first trip to China in nineteen ninety nine. You know Guan Joe is a hot manufacturing bed today. Quiet Joe is the number three tier one city in all of China and it's been that transition that it got there through manufacturing. So I think it's something it's all relative. But you know this is something we take great pains that we do when we're evaluating making sure that shops are meet the standards and deliver things that way that we want them to be. Well sometimes your products are made the United States or not. Of course it's a very small percentage. Today we gave up on that a long time ago. So let's talk about Baltimore. You're from the Washington suburbs. Why did you decide to locate the headquarters Uber your company in Baltimore which is my hometown. It's a great city but wasn't a natural place for you to locate a headquarters or was it I think two things. Number one there was there was something about the grit of the city that was appealing to me of never. I moved there in August of 1998 that felt like it was the grit of Baltimore with sort of this this lunch pail work. You know Chip on your shoulder. And that's really what I wanted the brand to be and so there was a reflection there. The second thing was being the youngest of five boys you know growing up here I had a lot of history in this town. It was nice just to get a fresh start in Baltimore as a place that's close enough to mom but far enough away to really start with a clean sheet of paper today . How many employees do you have in and around the world. When the fourteen thousand thirteen thousand. How many are in Baltimore area today there's probably thirty five hundred four thousand between corporate and one of our main warehouses that we have there as well. Now you've been very involved in philanthropy in many different areas. One is in Baltimore and now you outfit at your own cost the athletes of all the Baltimore City public schools. Is that right more or less you know what I think is neat is the unique thing about an Under Armour is that we have the ability to connect with kids in a way that other brands don't and so you know a bank or an insurance company. It's nice but kids want to be around our brands with the ability to take advantage of that. And so the things that we do to activate is you know we have things that are EV and every one of our teammates as we call them contributes 32 hours a year. And we have something we called Armor days which we did one this year. We put 12000 hours of of of man and woman power together to actually transform three middle schools in Baltimore City. For me personally the ability to touch you know up to 500 kids through summer programming tuition assistance college graduate education college and other things so the ability to actually affect both lives before and lives that need another opportunity are some of the things I think that we're taking on and really try to make a difference in Baltimore City. All right. So the first day the stock goes up 100 percent and then for I think it's roughly 26 consecutive quarters. Here's your . Our revenue went up 20 percent a quarter. So that's very unusual to keep going up that way. At what point did you realize you just couldn't keep doing that. I you know we had a great run from 2010 through 2016 roughly. You know with that kind of growth with something that we've never really been seen in consumer retail before we were you know we achieved crossing 500 million or billion or you know faster than any other brands had done in our space and we effectively from 13 to 60 we were from two point three to four point eight billion dollars more than double the size of our company in less than three years . And that puts all kinds of strain because this isn't software that just leverages out the backside. This is infrastructure in facilities in boxes and buildings and a lot of things that we you know I think we made a great run in fact today your market value is about nine and half million dollars more or less but it was almost double that at one point. Yeah. So did you when it started going this way did you think you had to reinvent your company or what did you decide to do I think every company every great company every great brand will come to a crossroads where they have to decide. How are you going to attack it. And I believe that that's something that we've taken on we'll call it a transformation. And that meant a lot of restructuring charges a lot of reorganizations. We had to enforce you do some risks in our company and in going through all that process it's made us a better and stronger company. So are you are not in the athletic equipment business unlike some of your competitors. I think I'd say Nike they make some athletic equipment. Why are you not in that business here in the apparel business. That's a equipment's a tough business and there's lower margins it's not as not as compelling or attractive and I think that we effectively believe that we bring equipment our footwear is not just another shoe it's a shoe that comes with an app it's a shoe that actually will help coach you to make you better. Our apparel isn't just apparel that whereas because of stylish are cool it should be stylish cool but makes it great. That jacket you're wearing is lined with selling which actually helps increase your blood flow and helps your muscles recover faster to put you in better shape for tomorrow . All right. I'm feeling the blood flowing already. Yes. Now in China very often if when I'm there I sometimes see knockoffs of American goods and so forth. Are there knockoffs there. You to worry about or is that a problem there. We've had several lawsuits and it's just I don't know from the lawyers the like but it's you you're striving for that moment where people want to knock you off and then all you want to do is protect yourself . Obviously when can. But we've had some crazy lawsuits that have come back and they've resolved the Chinese courts have been great to us too. So. So let's talk about for a moment how you're your culture of your company. You were in the news recently for me. The nature of your inclusion and not including certain people in your company. Can you address the culture issue. The hard thing with building a business is that the first thing that I wanted to do is I wanted to build a house. I want to build a great house. And as you grow you realize that house has become a building and it's gotten a tall building . And the first thing is that for any entrepreneur is that as the CEO I am fully responsible for everything that happens in my company. But what I'm required to do and where I'm accountable for is the actions we take when bad things happen. And I think we've been incredibly proactive when it comes to issues that that arise and this is something that's going to happen in any organization the size of fourteen thousand plus and so we'll continue to make that we can be proactive we'll continue invest into our culture to make sure it is inclusive it is diverse it is something that is it is it is an equal opportunity for anyone who wants to join our brand and we encourage that. And again that's not just simply a statement it's a statement because it's the best thing for our business. What is the outside pleasures that you really enjoy. I love driving home the parking my car walking next door to where my kids go to school and watching my daughter play field hockey or watch my son play football or play hockey. You know it's it's it's not easy being being our kids because of course my kids are required to only wear under armour all the time about the athletes and when you sign up an athlete is it a very arduous process. It's it's you have to work. I mean to have the best athletes are different today you know and again trying to relate with a 20 something year old. You want to make sure that you're speaking to them because today's athlete is incredibly sophisticated as well as they understand they are brand. They understand what they're bringing to the table and they have a really good understanding of what their market value is. And they'll test that. But the way to win these athletes it's not always through the front door if you're showing up at the you know it's Sun Tzu is the you know the victorious army attacks the defeated enemy. If you're winning the negotiation table for that to be done you're going to lose. When we sign Stephan Curry for instance it wasn't waiting to get be one of those three shoes with Riley. There was a guy named Ken bass Moore who is an unsigned free agent who happened to just have his locker right next to Stefan. So we signed Ken Bazemore and then we loaded Ken with products like on a daily basis and it was this thing where his job was to help us sign Stefan and then eventually Stefan just said Man if they carry you this well imagine what they're going to do for me . And he helped him with the understanding and that was you know you have to play chess with these things and certainly not checkers. So now one of your products is new is pajamas now . Is that an athletic kind of thing or what is that. So it actually is what led to the topic you're wearing now is where what makes Under Armour unique is of course the styling the fit in moisture management all those things that people have always taken for granted about our brand but the consumer actually wants or deserves more. And so Tom Brady actually brought to us this idea of the selling it lining where because the way that he's played well into his 40s is because he actually when he recovers and you've seen bruised knees elbows he uses this wrap and he believe in and you've seen things from those copper bands and other things out there. But this is a first it's actually FDA proven that it increases blood flow which helps increase the speed at which you can recover have your muscles back faster so you're playing from one day to the next you can actually come back that much better. And he asked if we could do a pyjama line and we introduced that and it was something where people actively recovering at night. We said why they just actually recovering at night What if we actually put it into their active wear too. So one of the things we'll be launching this spring at 19 is something called Rush something called Recover which actually includes this recovery material into what you do. You're very well known for having a white chalkboard in your office and you write sayings there. Is that a way that you teach people or you encourage people or motivate people what is what is the theory behind that. I've kept it since I started and as an athlete this is where coaches would keep everything from depth charts to slogans or sayings and for me it's a place we've always capture the real spirit and essence of the brand and it would say things like over promise and deliver dictate the temporal. It says things like trust you know it's built in drops and it's lost in buckets. It has sort of the the things that make and really require that the DNA of what is under armour. You've built a great company and you've made a great deal of money by any normal human standard. So what do you do with rest and relaxation with when you're not working right now. What is the outside pleasures that you really enjoy . Other than interviews like this I love. I love driving home parking my car. Walking next door to where my kids go to school and watching my daughter play field hockey or watch my son play football or play hockey. You know I think I've got a terrific family and I'm very fortunate for that and to have I think the ability now where you get to watch it sort of play out through the eyes of kids and you know it's not easy baby. In the end our kids is because of course like the kids are required to only wear under armour all the time. So today I suppose they were Nike thing what would happen . I did that. Maybe every bad thing they would but they wouldn't do that. They wouldn't perform as well either. That's got it. I mean I've been running their little legs telling them like don't ever wear them. I'm like love love the brand. It's important when you were an athlete you were not a superstar athlete but now the people who are on your team who are better athletes they come to you for jobs. That happens sometimes but no. If we're ever in the position it's it's sports. In sports there is I think one the most important training grounds I know that I wouldn't be doing under armour. Had it not been for you know having played a sport and been in football for the obvious reasons but also for more is that you learn team you learn understanding I think you know football is a game that is you know as great pressure on it right now. But the lessons learned in America without football would concern me a lot more than America with football. I wonder if you ever thought of signing up private equity people as endorsers because you know I mean today right. We're athletes too and we can endorse. So there might be people who might follow my endorsement so you might think about that. That's a that's a small market with ise with big opportunity for a high average order value that we were . Thank you very much for that. Thank you very much. Bishop Michael Barr .

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The David Rubenstein Show: Under Armour CEO Kevin Plank

David Rubenstein sits down with Kevin Plank, the founder, chairman and chief executive officer of Under Armour Inc., to discuss how he started and grew the company, and how he enticed athletes like Stephen Curry, Michael Phelps and Tom Brady to sign endorsement deals. The interview took place in Washington on Nov. 27, 2018. (Source: Bloomberg)

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The only daily news program focused exclusively on technology, innovation and the future of business from San Francisco. Hosted by Emily Chang.
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