When hundredths or even thousandths of a second can mean the difference between success and failure, it's understandable that athletes in speed events would look for excuses when things go badly. Such is the case at the Sochi Olympics, where disappointing results have been blamed on everything from slushy conditions and poor ski waxing to bad blades and Russian skulduggery on the luge track.
But some people associated with the underperforming U.S. speed-skating team have come up with a more unusual complaint, one that could severely dent the brand image – and sales potential – of a major maker of athletic gear. After several uncharacteristically bad performances, including a shocking eighth-place finish in the 1,000-metre race by world record holder Shani Davis, word got out that the suspected culprit was a flaw in the flashy new racing suits supplied by Under Armour Inc.
Supposedly, vents on the back of the suit to let heat escape are permitting air to get inside, creating drag and preventing skaters from reaching their fastest times. Mr. Davis refused to put the blame anywhere but on himself. But when asked if the suits were responsible for the fact no Americans did better than seventh in the first six events, the team coach would only say: "I'm not going to comment on that. We have to race in the suits."
This is not the sort of publicity any sponsor is looking for when it spends millions tying its brand to a high-profile team on the world's most important sports marketing stage. And in Under Armour's case, it could have serious consequences, even if the complaints turn out to be just sour grapes rather than anything material.
The American company has scored significant gains in the hotly competitive sports apparel market by using elite athletes as a showcase for its high-tech gear. But the company's slogan – "Our mission is clear: make all athletes better" – could look silly, if it actually makes athletes worse.
Its high-flying stock slipped 2.4 per cent Friday to close at $106 (U.S.), not far off its 52-week high of $110. The key driver has been its pricey synthetic athletic apparel, which accounts for about 75 per cent of Under Armour's revenue stream and has been growing at a rapid clip for the past 16 quarters.
Under Armour has seized more than two-thirds of an athletic market estimated to total about $3-billion, easily outpacing such rivals as Nike and Adidas. And there is plenty of room for expansion, because the company still has a relatively small international footprint.
Foreign sales account for only about 6 per cent of its total revenue. The company hopes to double that share by 2016, which is where the Olympic marketing comes in. But if the vent flap hurts its image abroad and translates into weaker consumer demand at home, Under Armour will have a tough time justifying its lofty stock valuation.
The company appeared caught off guard when The Wall Street Journal broke the speed-skating story. Kevin Haley, the senior vice-president for innovation, expressed faith in the uniform, which had not been race-tested before Sochi. But he added that the company would "move heaven and earth to make them better."
Later, the executive was singing from a different hymn book. "The organization is reaching the conclusion it's not the suits," he told Bloomberg. "The bottom line is there are multiple variables that go into the final result, and because these are great athletes who have given everything they have to train for this event for the last four years, everyone is searching for answers to the question of why haven't these athletes stepped up on the podium."
If Under Armour needs help understanding how widespread the brand fallout could be, it ought to give rival Lululemon Athletica a call. The Canadian company's see-through yoga pants fiasco affected far more people than badly vented speed-skating outfits ever could. But it's never wise to blame the customer – whether it's a casual exercise enthusiast or a world-class athlete.