Placer Bytes: Under Armour, Dunkin’, Levi’s

Chip on Under Armour’s Shoulder

Nothing ignites the competitive retail spirits like some good, old-fashioned industry insults. In a recent interview, Lululemon founder Chip Wilson said that Under Armour “lost it many years ago” attributing much of the company’s decline to the focus on wholesale. Instead, he opined that the future of the U.S. athleisure space belonged to Lululemon, Nike and Adidas

The slight to Under Armour could actually indicate an ideal strategy for a sweat-proof rise. Many brands have been increasingly utilizing an owned brick-and-mortar presence to buttress, if not fully replace, a wholesale mindset. Data indicates that Under Armour could potentially benefit from this as well. 

The brand has seen strong offline growth, with nearly every month in 2019 outperforming the same period in 2018. This includes peaks in the back-to-school and holiday periods. 2019 visits in July and august of 2019 rose 48.3% and 64.6% above the baseline for the period from January 2018 through December 2019, besting the 27.3% and 30.7% rises in 2018. The same growth was seen during the holidays, when visits jumped 24.1% and 36.7% above the baseline in November and December, outperforming 2018’s 1.8% and 34.8%. 

Could Wilson’s insult be the recipe for success? Early indications would suggest so. 

Dunkin’s Winter Opportunity

Dunkin’ Donuts is testing out a range of new concepts including a heavier focus on deliveries and store remodeling programs. Yet, the biggest value may come from figuring out a way to better handle the winter months.  

Looking at the two year period from 2018 through 2019, Dunkin’ sees a seasonal trend where traffic declines in the winter and annual high points come in May and June with another recurring peak in October. But this ignores the opportunity in the colder months.

Starbucks, Dunkin’s chief rival, sees a different distribution, with annual peaks coming in November and December, supported heavily by the boon that is Black Friday. This reality points to a potentially massive opportunity for Dunkin’ to better orient itself to take advantage of consumer needs for a hot drink during the coldest times of the year. By better aligning itself for this, whether through winter-based promotions or new products, Dunkin’ could reach its fullest potential in 2020.

Levi’s Retail Expansion Continues

Levi’s CEO Chip Bergh said in an earnings call that the company would be using a new store format to enable “smaller footprint, more profitable, more capital-efficient stores in better locations.” 

Why is this so important? Because the company is seeing a powerful combination of in-store retail growth and a decline in its wholesale business. The last week of December 2019 brought in visits that were 81.9% above the baseline for the two year period from January 2018 through December 2019. That’s far higher than the 60.8% mark above the baseline the brand enjoyed in 2018.  

Small format stores not only signal an ability to more efficiently expand, they allow brands to get into higher-income areas where real estate costs are equivalently more expensive. The Levi’s audience during that same period had an average income that was inline with other top tier retailers. Meaning the brand has confidence that these audiences will certainly take advantage of the new locations. 

Can Under Armour prove its critics wrong? Will Dunkin’ figure out how to dominate the winter? What will the impact of Levi’s expansion be? Visit to find out.

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