Athletic apparel, footwear, and accessories manufacturer Under Armour (NYSE:UAA) has had great success growing rapidly in North American markets, and the brand is now recognized as a premiere athletic label by consumers. The next logical step for the Baltimore-based company is to expand its international footprint and become a true global competitor to Nike (NYSE:NKE).
All the company's latest announcements indicate that Under Armour management is fully committed to international expansion and is already well on its way to ensuring future growth in this regard. The brand's recent expansion into Panama should increase brand awareness among international consumers and allow the company to better target consumers in the surrounding areas.
On June 26, Under Armour management unveiled its newest retail space on location in Panama City. The store is located in the Multiplaza Pacific Mall, one of the city's premiere shopping centers, and features Under Armour's broad selection of signature apparel, footwear, and accessories.
Charlie Maurath, president of Under Armour's international division, explained in the company's statement:
Introducing the brand to new markets through authentic retail environments allows us to communicate a powerful and consistent brand story as we continue to expand globally. Athletes in Panama now have the opportunity to experience first-hand the brand's passion for innovation and story-telling.
The Panama City store is Under Armour's first retail location in Central America. Since the new store will mark many consumers' first experience with the Under Armour brand, it is important that the store's atmosphere properly convey the essence of the sports brand to consumers.
To this end, management seems to have hearkened back to the company's early days of branding in the United States. The new store focuses heavily on Under Armour's dedication to enhancing athlete performance and the brand's "signature raw and gritty ethos."
As soon as consumers walk into the store, they are greeted with a large LED screen that displays some of the company's successful advertising campaigns and reinforces the brand's athlete-centric focus.
If the company can find success in Panama, the Under Armour brand stands to gain many new supporters. Also, the new store could serve as a launching point for additional brand expansion in the future.
International is still largely untapped
Under Armour has made progress expanding into new geographic markets recently. In the past six months alone, the company has also entered Brazil, Chile, the Philippines, and Singapore.
However, international still only represents approximately 10% of revenue for Under Armour. The segment generated $59 million in the first quarter of fiscal 2014 compared to the North American segment, which generated $583 million.
When compared to global footwear behemoth Nike, Under Armour is still way underexposed to international markets. Nike derives more than 50% of total Nike brand revenue from international. In fiscal 2014, which ended in May, Nike generated $27.8 billion in total revenue. For comparison, Under Armour generated just $2.3 billion in fiscal 2013.
Despite numerous new store openings across the world, Under Armour is still in the early stages of international expansion, especially when compared to industry competitor Nike. As long as management can properly advertise the sports brand to new consumers in foreign markets, the powerful momentum behind Under Armour seems set to continue.