Under Armour, Inc. UA, a leading developer, marketer and distributor of branded performance products, recently inaugurated its new distribution and warehouse facility outside Nashville in Mount Juliet, TN. The new one million square foot facility is expected to create 1,500 jobs in the area over a period of 5 years.
The Nashville distribution house is the company’s third such distribution facility in the country after the original warehouse in the Baltimore, MD metropolitan area and another in Rialto, CA. Under Armour’s new Nashville facility, with a capital investment of over $100 million, is expected to take its shape over a period of 5 years.
The Nashville facility will house an onsite fitness centre for employees, state-of-the-art equipment together with a 12+ mile conveyor system, automated receiving technology, voice-directed-picking software and advanced sortation methods. Under Armour feels that this new facility will help the company to better serve its rapidly expanding customer base.
On the other hand, Under Armour continues to seek opportunities for increasing its global footprint and market share. Though the company generates major portion of its revenue from the North America region, it intends to expand business operations to other parts of the world to mitigate the risks stemming from concentration in one geographic region. In the process, over the years the company has opened its factory and brand stores in Canada and China while giving franchise licenses in many countries.
Another major tool used by Under Armour to broaden its ambit is the development of an International e-commerce team. The company is also entering into deals with players like basketball star Stephen Curry and golfer Jordan Spieth, which will help in enhancing brand recognition and get an edge over its competitors.
In a similar move, the company’s rival Nike Inc. NKE entered into a lifetime endorsement deal with basketball star LeBron James. Though the terms of the deal were not disclosed, this is reportedly the biggest endorsement deal in Nike’s history.
Currently, Under Armour carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the same industry include Hanesbrands Inc. HBI and Ralph Lauren Corporation RL. Both stocks carry a Zacks Rank #2 (Buy).
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