Under Armour is entering a dying industry to revive sales

Under Armour is turning to department stores to revive sluggish sales growth.

The athletic retailer is going to start selling apparel at Kohl’s, Bloomberg reports.

The company will sell its apparel at over 1,100 stores beginning March 1.

“We shared our conviction and our strategy that we intend to be the destination for active and wellness for the family, and I guess they were inspired by that because we’re launching,” Kohl’s Chief Merchandising Officer and Customer Officer, Michelle Gass, told Bloomberg. “Active was one of those areas where we’re already seeing strength with Nike and some others, and we said, ‘Let’s take it to the next level.”

Bloomberg notes that adding Under Armour to its selection is a component of its turnaround program, called The Greatness Agenda, which has been in effect since 2014.

Department stores including Macy’s, Sears, and JCPenney have been struggling as many consumers eschew apparel shopping for experiences like travelling and going to restaurants. All three retailers have announced plans to close stores.

Kohl’s has reported sluggish sales and profits in the most recent quarter. In February, it also announced that it would be closing stores.

Kohl’s target customer is described by Bloomberg as “women who are there to shop for themselves as well as their families” — suggesting that they’re mothers.

Another boon for Kohl’s is that, as Rupp writes, activewear remains a strong sector there; Gass told Bloomberg it grew 15% last year. Activewear as a whole remains one of the few categories for which normally frugal customers appear to be willing to pay a premium.

But while this is could be good for Kohl’s, the question remains: is this good for Under Armour? The company believes so.

“As we look at our brand and mature and evolve, we believe there’s a customer that shops primarily at Kohl’s and is passing on our brand because it”s unavailable,” Under Armour’s North American President, Matt Mirchin, told Bloomberg.

It’s also a tactic from Nike’s playbook, as Nike is sold at Kohl’s, but it’s worth noting that Nike has been facing some issues lately, too.

Analysts have expected this partnership. A note from UBS analysts on Monday anticipated this, expecting it in the second half of this year, writing that this would “minimise further revenue disruption.”

In early July, Morgan Stanley’s Jay Sole told The Street that he believed that if Under Armour partnered with Kohl’s and JCPenney, that in time, it could be worth $550 million. At the time, he believed that the partnership with Kohl’s could be worth $190 million.

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