(Recasts to include analyst commentary and background
By Ananya Mariam Rajesh
Dec 21 (Reuters), Under Armour Inc. has appointed Stephanie Linnartz, a veteran hotelier as its chief operating officer. Linnartz believes her expertise in e-commerce will help the apparel maker to regain sales.
Linnartz will join Baltimore’s Under Armour starting February 27th. He will be taking over as Under Armour struggles with insecure demand for clothing and other discretionary items due to decades-high inflation that has impacted consumer spending.
Under Armour lowered its annual guidance last month due to promotions and a weaker dollar. The stock has more that halved this year.
The company has product lines that are backed by Dwayne Johnson, actor, and Stephen Curry of the National Basketball Association. However, it faces stiff competition from Nike Inc. Nike Inc is turning around inventory problems and reporting strong quarterly results Tuesday.
The appointment of an outsider to the role of CEO is reminiscent of a similar move made by Nike nearly three years ago, when former CEO at eBay Inc John Donahoe was given the task to strengthen its online strategy.
Morningstar analyst David Swartz stated that Under Armour selected someone from outside the industry, which was a little unusual.
He said that it was clear that the company was interested in her experience in developing Marriott’s digital strategy and membership program. He also noted that these are areas in which Adidas AG and Nike trail.
Linnartz is currently president of Marriott International Inc. He has worked with the hotel chain operator for 25 years in various capacities.
She will succeed Patrik Frisk who resigned in June after two-years on the job. Under Armour announced that Colin Browne, the interim CEO, will return to his duties as chief operating officer.
In after-market trading, Under Armour shares dropped 2%
Linnartz will be paid a $1.3 million base salary and a $375,000. cash bonus as a sign-on cash bonus. (Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Anil D’Silva, Shinjini Ganguli and Sayantani Ghosh)