After building a sizable presence on turf, Under Armour (UA) is making moves on the hardwood. On Tuesday, the company revealed that it has signed Golden State Warriors guard Stephen Curry to a multiyear contract for an undisclosed sum. Curry, who will eventually get his own namesake shoe, will wear the UA Micro G Anatomix Spawn model this season. It retails for $120.
The news of the endorsement deal sent the Baltimore-based company’s shares to an all-time high of 82.69—more than a 4 percent jump. According to Under Armour, Curry is an ideal fit: “Our key attributes for players we want to have on our team are young, underdog and next—and Steph checked those boxes,” Matt Murchin, the company’s senior vice president of global marketing, told ESPN (DIS). The soft-spoken 25-year-old certainly fits that criteria: Curry was drafted in 2009 after a breakout performance in the NCAA tournament, when he emerged as a deep threat for long-shot Davidson College. Curry has since emerged as one of the NBA’s top guards. Of the top 10 scorers in the league, according to ESPN, Curry will be only the third to forgo the Swoosh. (Until this year, Curry wore Nike (NKE).)
The hoops effort arrives as Under Armour works to position itself as a viable competitor to Nike, whose Jordan Brand dominates the basketball shoe market with a 93 percent share. For its part, Under Armour, which excels in the categories of workout apparel, jerseys, and other shoes, holds only 0.35 percent of the market share for basketball shoes.
Regardless of the boost in stock price, some experts argue that betting big on athletes to sell shoes isn’t all it’s cracked up to be. “Overall I don’t think any athlete really pays for himself today in the endorsement market,” SportsOne Source retail analyst Matt Powell told the Baltimore Business Journal. “The ability of a player to really move shoes is relatively slim.”
When it comes to “underdog” brands, history reinforces Powell’s point. In the 1990s, Karl Malone and Hakeem Olajuwon—in addition to Paul Abdul and Belinda Carlisle—couldn’t seem to get LA Gear brand off the ground. (The company filed for bankruptcy in 1999.) As hard as he tried—and he tried hard—New Jersey Nets forward Derrick Coleman couldn’t get basketball fans to plunk down on a pair of BK Knights, which were later rebranded as skate shoes. In March, the Chinese company Li Ning (2331:HK)—which recently added Dwyane Wade to a roster that has included Shaq and Baron Davis—announced a net loss of $319 million for 2012.
To be sure, Under Armour is in a much stronger position than those companies. Its revenue more than doubled from 2008 to 2012, according to the Wall Street Journal. (And, unlike some of the aforementioned brands, its heels do night-illuminate.) But that hasn’t stopped sneakerheads from leaping to voice opinions. According to “Wild 100″ on Sneaker Watch: “[Curry] will get buckets, that goes without saying. As far as shoe sells [sic], ain’t nobody buying those sh#ts.”