Under Armour onto a winner with Charged Cotton
By Leonie Barrie | 8 February 2011
For a brand that used to attack cotton as "the enemy," performance-apparel maker Under Armour has had a major change of heart with its new Charged Cotton line, which it now believes is "one of the biggest product stories we've had since our first shirt in 1996."
"When we first brought the idea of moisture-wicking compression apparel to the market, our goal was to make athletes rethink expectations for their apparel," Under Armour founder and CEO Kevin Plank told analysts recently.
"And with the development of charged cotton, the next chapter in Under Armour's innovation platform will raise expectations once again."
The reason for its turnaround comes after extensive product development managed to merge the comfort of cotton with a range of performance attributes such as advanced moisture wicking. At the same time cotton's inherent lack of absorption - a huge obstacle in fitness wear - is said to be a thing of the past.
Due to launch next month, the Under Armour Charged Cotton Collection includes men's and women's shirts and shorts. The company hopes it will take the brand to new consumers as well as new level performance to a category "where expectations for it have been low."
"To be clear, we never hated cotton as much as we had a problem with the fact that cotton never performed before," Plank elaborates. "So what we've done is we frankly created the world's first performance cotton T-shirt by the Under Armour brand."
Consisting of alternating hydrophilic (moisture absorbing) and hydrophobic (moisture repelling) cotton yarns, Charged Cotton pushes out sweat when it comes in contact with the fabric. As a result, moisture spreads across the surface area of the clothing, thus speeding evaporation and helping athletes keep cool. And to prove that it's working, the fabric takes on a "strided" look as the wearer starts to sweat.
As if this wasn't enough, the company describes the new fabric - a mix of 95% cotton and 5% elastane - as the "softest, most comfortable material Under Armour has ever produced," adding that it dries five times faster than ordinary cotton and combines stretch and recovery for a lower "cling force" and a stick-free fit.
"It's probably the most comfortable cotton T-shirt or T-shirt that you've ever put on," Plank adds.
His enthusiasm is understandable as he points out that Under Armour has already built a billion dollar business on an apparel range dominated by synthetics, without a cotton garment in sight. Indeed, it revealed details of the new line as it posted a 46% jump in full-year earnings to $68.4m, as sales rose 24% to $1.06bn.
For a company whose strategy is built on adding new products to its core moisture-wicking compression apparel, "like chapters in a book," the new category makes it relevant to a whole new audience.
Teens have around 26 cotton T-shirts in their wardrobes, but just four technical performance tops - and Under Armour now hopes it can grab a significant slice of this cotton business.
"We're addressing an existing consumer need [which is] driving a lot of excitement out of our retailers."
Of course there's an irony in launching a cotton-based product just as prices of the fibre have reached all-time record highs, although the company is keen to play down the impact of this and other sourcing costs.
"Although we're entering the cotton market this year, it will still be relatively minimal to our total sales volume for the year," points out CFO Brad Dickerson. "We do also see, obviously, synthetics pricing pressures going up there also." He notes that most of the reported labour cost pressures apply to China, but Under Armour sources less than 10% of its apparel here.
"We can mitigate some of these price pressures in sourcing just through some selected price increases, and we've also dropped a few lower margin styles, too."
Under Armour is confident the added value performance of its Charged Cotton line will allow it to create a new premium price point in a $25 cotton T-shirt.
"It's a phenomenal product," Plank says. "It is the most comfortable, beautiful $25 T-shirt in the world [and] it's going to make all those $80 and $90 cotton T-shirts from the designer labels seem ridiculous."
And if the results of a recent survey are anything to go by, the firm could definitely be on to a winner. 97% of consumers questioned by Cotton Incorporated said they would be willing to try or purchase cotton sports apparel that offered the same performance features as synthetics.
Companies: Under Armour
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Under Armour onto a winner with Charged Cotton
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