Inc. - Kevin Plank Is Betting Almost $1 Billion That Under Armour Can Beat Nike 5-15min

Plank has the affect and intensity of a head coach--direct eye contact, military analogies, the air of someone you do not want to disappoint. "Winning is a part of our culture--it's who we are," he says in his lofty office overlooking the harbor. (The only artwork behind his desk: a giant UA logo, its letters stacked to evoke arms raised in victory.) "And culture is formed on habits." Perhaps the most important guardrail, and the company's official mission, is seeking to "make all athletes better." It has long equaled thinking about clothes as high-performance gear, but recently it's taken on a big new meaning. ... Over the past two years, Under Armour has spent close to $1 billion buying and investing in three leading makers of activity- and diet-tracking mobile apps. By doing so, the company has amassed the world's largest digital health-and-fitness community, with 150 million users. Plank envisions all of those users, and their metrics, as a big data engine to drive everything from product development to merchandising to marketing. Many observers, though, balked at the $710 million cost of the acquisitions ... the high-stakes bet on Connected Fitness will be slow to pay off. Under Armour recently increased its projections for the next two years, estimating that it would nearly double net revenue by 2018, to $7.5 billion (up from a previous estimate of $6.8 billion). Only $200 million--a paltry 2.7 percent--will come from Connected Fitness. ... "If I'm right," he says, Connected Fitness "becomes a force multiplier that takes us from shirts-and-shoes company to true technology company. If I'm wrong, it costs us some money--we have $710 million on the table."