Under Armour CEO walks back pro-Trump remarks amid criticism, downgrade
In an open letter published in a full-page ad in the Baltimore Sun, Under Armour CEO Kevin Plank sought to walk back his earlier contention that President Donald Trump would be an “asset” to the country.
“In a business television interview last week, I answered a question with a choice of words that did not accurately reflect my intent," Plank writes. "I want to clarify to our hometown exactly the values for which Under Armour and I stand.”
Under Armour celebrity endorsers Stephen Curry, Dwayne “The Rock” Johnson and Misty Copeland all publicly came out against Plank’s remarks, and Susquehanna International Group analyst Sam Poser slammed Plank in a note to investors this week, saying his comments undermined the brand’s efforts to “build a cool urban lifestyle brand in the foreseeable future” and cutting his UA stock-price target to $14 from $24, a low-ball number compared to other analysts, according to Bloomberg.
After Plank called Trump “a real asset” for U.S. companies in an interview with CNBC, Under Armour’s most high-profile athlete, Golden State Warriors shooter Stephen Curry, responded “I agree with that description if you remove the ‘et’ from 'asset.'” Curry also told The San Jose Mercury News that he didn’t vote for Trump and expressed concern about Under Armour aligning itself with Trump’s values.
Plank addressed those values in his letter Wednesday, saying Under Armour is opposed to the president’s travel ban, in favor of immigration and stands firmly for diversity, including gender equality. He also touted UA’s made in America manufacturing efforts, unveiled earlier this year, and its investments in hometown Baltimore.
Plank’s retreat is an indication of how toxic the president has become for brands, with even his own high-profile endorsers fighting him on the notion of Trump as a positive force. “At this point we don’t believe Under Armour is in danger of losing Steph Curry,” Poser said in his note, according to Bloomberg. “However, it simply cannot be good for business if the face of Under Armour spoke out so pointedly against the CEO’s comments."
Indeed, a growing number of retailers appear to believe that fighting Trump (and by extension his daughter Ivanka Trump’s own apparel and accessories brand) is the stronger play than supporting him. The Trump brand has become a lightning rod for controversy, and Ivanka Trump’s company, from which the first daughter reportedly stepped down last month, is not exempt. Nordstrom earlier this month halted sales of Ivanka Trump merchandise, and retailers including Belk, Sears and Kmart have since ceased selling Trump-branded merchandise as well. Off-price retailer TJ Maxx reportedly is mixing its Ivanka Trump goods amongst its other apparel, pulling signs and dedicated racks from its floors, and Macy’s is also under pressure to dump the brand.
In Nordstrom’s case, its comments about the line’s performance are bolstered by third-party data. Analytics firm Jumpshot tracked traffic to Ivanka Trump products on Macy's and Nordstrom since Jan. 1, 2016, and found that while traffic to Ivanka Trump products on Nordstrom was much higher than on Macy's between April 2016 and September 2016, traffic on Macy's has exceeded Nordstrom since October. While Macy's and Nordstrom both saw a spike in November, traffic to Ivanka Trump pages decreased on Nordstrom by about 14% in December and January, and increased on Macy's by about 18%.
"We’ve all been hearing that 'the rules no longer apply' and this is now more true than ever,” Phil Rubin, CEO, rDialogue, said in comments originally posted to discussion forum RetailWire. “Politics are increasingly inseparable from business and vice-versa, and that is largely due to the POTUS and his executive actions in his first few weeks. It’s not just Nordstrom either. Look at Uber and Lyft, where the former saw mass customer defection due to its CEO meeting with POTUS ... We are only at the beginning and the longer-term ramifications are not yet understood. What is clear, however, is that brand loyalty will be either reinforced or eroded through increasingly political forces.”
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