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Under Armour cuts forecast, to restructure operations

Sportswear maker Under Armour cut its full-year sales forecast amid fierce competition in the athletic apparel market, and launched a restructuring plan that involves closing stores and cutting about 2 per cent of its workforce. Under Armour is also the maker of Stephen Curry basketball shoes and Bandit running shoes. The company, which wooed investors with its quick-paced growth until a few quarters ago, has been ceding market share to No. 1 sportswear maker Nike Inc and Germany's Adidas AG.

Jane Hali, CEO of retail investment research firm Jane Hali & Associates feels Under Armour's apparel lack in fashion. While brands like Nike, Adidas and Puma are thriving from retro revivals and casual looks, UA has struggled to develop an appealing shoe. As compared to its previous forecast of 11 to 12 per cent Under Armour is now expected full-year revenue growth of 9 percent to 11 per cent.

The company will cut 277 jobs across its operations, half of which will be at the company's headquarters in Baltimore, says Under Armour spokeswoman Diane Pelkey. It is expected a pre-tax charges of up to $130 million in fiscal 2017, related to store closures, lease terminations and severance costs. Under Armour closed 33 factory outlets and 23 Under Armour branded stores in one year. The company reported a net loss of $12.3 million, or 3 cents per Class A and B share, in the second quarter ended June 30, compared with a loss of $52.7 million, or 12 cents per share, a year earlier. Under Armour posted a net loss of 3 cents on its class C shares which represent its common stock.

 
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