Stephanie Linnartz acquired even much less time than anticipated to repair Beneath Armour’s many issues.
Linnartz, a veteran government who was beforehand No. 2 at Marriott Worldwide, left the worldwide resort chain final yr to change into CEO of Beneath Armour. She took over the struggling sportswear chain on Feb. 27, 2023—and, the corporate stated as we speak, she can be leaving the CEO position on the finish of this month, after simply over a yr on the job. She had stated that her turnaround technique for the corporate would take three years to execute.
Kevin Plank, Beneath Armour’s controversial founder and controlling shareholder, will once more change into its CEO, beginning April 1. The newest “boomerang” CEO to return to his former job (a bunch that features Disney’s Bob Iger and Howard Schultz of Starbucks) will change into his firm’s fourth CEO in 4 years. He first “stepped again” from the job in January 2020 to change into government chairman, and he continues to personal 65% of the corporate’s voting shares.
Beneath Armour didn’t give a cause for the abrupt CEO change, and a spokesperson declined to remark. In a LinkedIn publish, Plank thanked Linnartz for her contributions in the direction of Beneath Armour: “She helped advance the corporate ahead in lots of essential methods, together with elevating our management expertise in product, design, provide chain, client loyalty, and regional administration,” he wrote. “A lot work nonetheless must be carried out, however her management helped put us heading in the right direction towards profitable.”
Working Beneath Armour was all the time going to be a turnaround job–which Linnartz went into with eyes large open. “I imagine in taking calculated dangers,” she advised me final summer time, after I profiled her for Fortune.
“She has hit the bottom working, launching a clearly articulated three-year technique that units us up for strategic development,” Plank advised Fortune, in an emailed remark, on the time. “I couldn’t be extra excited to have her at Beneath Armour and to work along with her every single day.”
However the challenges Linnartz confronted had been steep: Beneath Armour had struggled to develop income or income since its early heyday. Its share worth has plummeted since its 2015 peak, and retail specialists name its model identification muddled, at finest.
In the meantime, Plank’s politics and private life have continued to place his firm into sometimes-unflattering headlines. And Plank had remained an unavoidable presence on the firm nicely after his departure from the CEO position, as I noticed after I visited the corporate’s headquarters in August—the place I used to be regaled a number of instances with the story of how Plank began the corporate in his grandmother’s basement in 1996:
“Buildings and attire strains are numbered both 96 (for the yr he based Beneath Armour) or 37 (for the variety of KP’s school soccer jersey),” I wrote then. “One hall at headquarters is adorned with an unlimited photograph of that jersey, subsequent to blown-up variations of Plank’s early Beneath Armour enterprise playing cards, subsequent to #inspo phrases like ‘HUMBLE & HUNGRY BEGINNINGS.’”
Patrick T. Fallon—Bloomberg through Getty Photographs
The seen ongoing presence of a charismatic founder generally is a drawback for a brand new CEO, says Neil Saunders, a GlobalData Retail analyst who covers Beneath Armour. “Even if another person’s CEO, Kevin Plank continues to be there,” he says. “It’s nonetheless a really founder-led firm … and most CEOs don’t need backseat drivers.”
Whereas Linnartz had employed a number of new senior executives and launched a rewards program to extend buyer loyalty, her technique had not yielded instant outcomes: Beneath Armour’s most up-to-date quarterly revenues fell 6 % from a yr earlier.
“She inherited a model that all the time had loads of issues,” says Saunders,. “And a yr is admittedly not sufficient time to make a change.”
Traders at first cheered Plank’s return: The corporate’s shares rose in after-hours buying and selling, earlier than sliding again down. Beneath Armour additionally introduced that, as Plank turns into CEO, Mohamed A. El-Erian, the previous PIMCO CEO, will change into the non-executive chair of its board.
“As I look again at my previous yr at Beneath Armour, one of many issues I’m most happy with is the wonderful expertise we have now introduced into the group,” Linnartz wrote in an electronic mail to Beneath Armour workers. She added that she needs Plank, “the chief management crew and all of you a lot success within the years forward.”
