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Is Under Armour’s Store Expansion Plan Too Aggressive?

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While the holiday season has seen many retailers take significant hits, Under Armour continues to keep trucking along. In a panel at the #NRF16 Big Show, Under Armour Founder and CEO Kevin Plank announced that the retailer plans to open 200 stores in 2016.

Plank did not specify which type of store formats the retailer plans to open, specialty “brand houses” or outlet “factory houses.”

Under Armour currently has 144 factory stores and 29 brand houses globally, so the openings will more than double the retailer’s store count. Part of the expansion plan includes a focus on store openings in China, according to The Street.

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The expansion is definitely a risk for the company, which initially made its name through the wholesaling of its products at partner retailers such as Dick’s Sporting Goods, Sports Authority and Foot Locker. With many brick-and-mortar stores experiencing a sales downturn over the holiday, the pursuit of more physical locations seems like an aggressive endeavor for a company that achieved record revenues in the most recent financial quarter.

“Our retail foray really began as a liquidation experiment,” Plank said during the NRF keynote. “For us, this meant trying to eliminate excess product and control the way we showed up in retail with the right partners in the right place.”

This control is a main factor in the expansion. With more stores, the retailer expects to achieve direct control over the marketing, distribution and store placement of a larger portion of merchandise.

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