Under Armour is cutting approximately 600 jobs as it expands the scope of a restructuring plan first unveiled in April.
In a document filed Tuesday, the Baltimore sportswear maker said it’s adding $75 million to bring 2020’s total restructuring costs to as much as $600 million. And beyond slashing hundreds of “primarily” corporate jobs—a move that’s expected to cost about $30 million in severance—Under Armour said it has earmarked $15 million for expenses including “lease termination costs.”
The No. 3 behind Nike and Adidas, Under Armour has had a rough go of it this year. In reporting second-quarter earnings, the company revealed a 41 percent plunge in revenue, as sales in the wholesale channel slumped 58 percent. Meanwhile, chief financial officer (CFO) David Bergman told analysts on a July conference call he expects a 20 percent to 25 percent revenue slump for the second half of the year and warned of even steeper Q4 revenue declines. It’s also been dealing with a federal probe into accounting irregularities that has scrutinized certain actions by founder Kevin Plank and the CFO.
Under Armour also reported $365 million in one-time charges in the quarter ended March 31, including $291 million related to a planned New York City flagship store that the company put on the backburner in February when the virus roiled the economic landscape. Under Armour had envisioned building a state-of-the-art brand house to take over the 53,000-square-foot space once occupied by iconic toy store FAO Schwartz.
Despite 2020’s unprecedented troubles and challenges, the company has found the occasional bright spot this year. A “Sportsmark” designed specifically for athletes who want to remain active but minimize exposure to Covid-19 sold out in less than an hour. And Under Armour is said to be building a brand around Golden State Warriors supernova Steph Curry, undoubtedly hoping to mimic Nike’s success crafting the Jordan Brand into a money-printing enterprise.