Stephanie Linnartz obtained even much less time than anticipated to repair Underneath Armour’s many issues.
Linnartz, a veteran govt who was beforehand No. 2 at Marriott Worldwide, left the worldwide resort chain final yr to develop into CEO of Underneath Armour. She took over the struggling sportswear chain on Feb. 27, 2023—and, the corporate mentioned in the present day, she might be leaving the CEO position on the finish of this month, after simply over a yr on the job. She had mentioned that her turnaround technique for the corporate would take three years to execute.
Kevin Plank, Underneath Armour’s controversial founder and controlling shareholder, will once more develop into its CEO, beginning April 1. The most recent “boomerang” CEO to return to his former job (a gaggle that features Disney’s Bob Iger and Howard Schultz of Starbucks) will develop into his firm’s fourth CEO in 4 years. He first “stepped again” from the job in January 2020 to develop into govt chairman, and he continues to personal 65% of the corporate’s voting shares.
Underneath Armour didn’t give a purpose for the abrupt CEO change, and a spokesperson declined to remark. In a LinkedIn submit, Plank thanked Linnartz for her contributions in direction of Underneath Armour: “She helped advance the corporate ahead in lots of essential methods, together with elevating our management expertise in product, design, provide chain, shopper loyalty, and regional administration,” he wrote. “A lot work nonetheless must be executed, however her management helped put us heading in the right direction towards profitable.”
Operating Underneath Armour was all the time going to be a turnaround job–which Linnartz went into with eyes huge open. “I imagine in taking calculated dangers,” she instructed me final summer time, once I profiled her for Fortune.
“She has hit the bottom operating, launching a clearly articulated three-year technique that units us up for strategic progress,” Plank instructed Fortune, in an emailed remark, on the time. “I couldn’t be extra excited to have her at Underneath Armour and to work along with her every single day.”
However the challenges Linnartz confronted have been steep: Underneath Armour had struggled to develop income or earnings since its early heyday. Its share value has plummeted since its 2015 peak, and retail specialists name its model identification muddled, at greatest.
In the meantime, Plank’s politics and private life have continued to place his firm into sometimes-unflattering headlines. And Plank had remained an unavoidable presence on the firm effectively after his departure from the CEO position, as I noticed once I visited the corporate’s headquarters in August—the place I used to be regaled a number of instances with the story of how Plank began the corporate in his grandmother’s basement in 1996:
“Buildings and attire strains are numbered both 96 (for the yr he based Underneath Armour) or 37 (for the variety of KP’s school soccer jersey),” I wrote then. “One hall at headquarters is embellished with an unlimited photograph of that jersey, subsequent to blown-up variations of Plank’s early Underneath Armour enterprise playing cards, subsequent to #inspo phrases like ‘HUMBLE & HUNGRY BEGINNINGS.’”
Patrick T. Fallon—Bloomberg by way of Getty Photographs
The seen ongoing presence of a charismatic founder could be a downside for a brand new CEO, says Neil Saunders, a GlobalData Retail analyst who covers Underneath Armour. “Even if another person’s CEO, Kevin Plank remains to be there,” he says. “It’s nonetheless a really founder-led firm … and most CEOs don’t need backseat drivers.”
Whereas Linnartz had employed a number of new senior executives and launched a rewards program to extend buyer loyalty, her technique had not yielded instant outcomes: Underneath Armour’s most up-to-date quarterly revenues fell 6 p.c from a yr earlier.
“She inherited a model that all the time had lots of issues,” says Saunders,. “And a yr is absolutely not sufficient time to make a change.”
Buyers at first cheered Plank’s return: The corporate’s shares rose in after-hours buying and selling, earlier than sliding again down. Underneath Armour additionally introduced that, as Plank turns into CEO, Mohamed A. El-Erian, the previous PIMCO CEO, will develop into the non-executive chair of its board.
“As I look again at my previous yr at Underneath Armour, one of many issues I’m most happy with is the superb expertise we now have introduced into the group,” Linnartz wrote in an electronic mail to Underneath Armour workers. She added that she needs Plank, “the chief management workforce and all of you a lot success within the years forward.”
