US sportswear brand Under Armour intends to cut 2% of its global workforce as it restructures its business in the face of declining sales.
About half the layoffs — some 140 — were effective immediately at the brand’s Baltimore headquarters, a distribution centre in Curtis Bay, an outlet store near the warehouse and a Brand House store in Harbor East, reports the Baltimore Sun.
Under Armour, which makes underwear, sports bras and other fitness apparel, reported its second straight quarter losses today, causing shares in the company to tumble 8.6%.
Net revenue rose 9% to $1.1 billion (£831.6 million), but high operating costs pushed Under Armour into a loss of $12.3m for the quarter, compared to a profit of $6.3m in the prior year period.
In a bid to turn things around, the company said it has approved a restructuring plan to more closely align its financial resources to support its efforts to better serve the evolving needs to the consumer and customer landscape.
“As we stand up our category management structure within a consumer-led approach, we intend to meaningfully increase our go-to-market speed and amplify our digital capabilities,” Under Armour chairman and CEO Kevin Plank said in a statement.
“We’ve identified a number of areas to enhance our operational capabilities, drive process improvement and gain greater efficiencies. We remain steadfast in driving and building our brand while shifting our operational focus to become more return-on-investment and cost of capital centric – institutionalizing discipline to deliver more consistent, long-term shareholder value.”
In conjunction with this plan, the company expects to incur charges of $110-130 million in fiscal 2017.
Things have gone from bad to worse for Under Armour this year.
Last month, Canadian athleisure apparel retailer Lululemon claimed that the brand copied its bra design and is launching legal action against the brand.
Lululemon is claiming that four of Under Armour’s sports bras copy the bra Energy Bra’s design, and is consequently suing for patent and trademark infringements.