Here’s How Under Armour Is “Smartly” Augmenting Its Performance Apparel
According to our estimates, the Performance Apparel segment is Under Armour‘s most important division, accounting for nearly 50% of its valuation. This segment is likely to account for nearly 65% of the company’s revenues in 2017, according to our estimates. The company is innovating to strengthen this segment and build a competitive edge. At the CES 2017, Under Armour unveiled “smart sleepwear” which will help athletes to rest, win and repeat. This Athlete Recovery Sleepwear has an infrared pattern inside the clothing which is meant to absorb infrared wavelengths and reduce inflammation while sleeping, aiding in the recovery time. Smart clothing is at a very nascent stage and is not likely to see very significant growth in the next few years. According to a research paper published by Berkley ELPP, smart clothing will account for less than 1% of the wearables market which includes smart watches and glasses.
The research cites lack of public awareness as one of the primary reasons for this slow adoption. However, this market is likely to witness strong growth in future. Tractica forecasts that overall shipments of smart clothing will grow reach 24.75 million units in 2021, representing a compounded annual growth rate (CAGR) of more than 70% between 2015 and 2021. The smart clothing market has yet to pick up and Under Armour’s smart sleepwear might not yet drive revenues for the company. Still, it showcases the company’s abilities to combine technology in its products and deliver smart products to meet consumer requirements. The company already has a line of smart footwear and its newest connected shoes are linked to its MapMyRun mobile app. With smart sleepwear, Under Armour is extending its technological capabilities to apparel, creating a whole package of smart wearables.
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According to our estimates, Under Armour’s Wholesale apparel revenues will increase steadily over our forecast period and reach around $ 4.6 billion by the end of our forecast period.
While introduction of smart apparels might not impact these revenues significantly, it will put Under Armour in the league of advanced sports-wear companies who are experimenting with technology for consumer delight.
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