Skip to main content

tv   The David Rubenstein Show Peer to Peer Conversations  Bloomberg  January 30, 2019 9:00pm-9:30pm EST

9:00 pm
♪ be a greatou could athlete or the ceo of an athletic apparel company, what would you rather do question mark kevin: see eo every day of the week, maybe not every day of the week. [laughter] david: a great basketball player comes to your house and wants to play, do let him win question mark -- kevin: wearing it increases your blood flow. david: i'm feeling the increase in blood flow already. [laughter] >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. alright. ♪ david: i don't consider myself a journalist.
9:01 pm
and nobody else would consider myself a journalist. i began to take on the life of being an interviewer even though i have a day job of running a private equity firm. how do you define leadership? what is it that makes somebody tick? thank you for sending over these nice shoes. [laughter] david: thank you for this. how come you are not wearing any of them? kevin: i am a bit embarrassed. they are available on the website. david: really? thank you very much. these will make me run faster? kevin: jump higher, run faster, and make you more secure. david: let's talk about your company, under armour. you have so many great athletes you sponsor.
9:02 pm
take stephen curry. you pay him a fair amount of money to wear your shoes, and he likes them come up but if he wants to play horse, does he let you when? you are paying him a lot of money every year? [laughter] i would be troubled if i won a game of horse against steph curry. david: what about if you want to swim against michael phelps? as he let you win? kevin: i don't know if i would try that. david: how about tom brady? does he throw you the balls soft? kevin: i think he only has one speed. ceod: if you could be the , or greatetic company athlete, what would you rather do? kevin: ceo every day of the week. maybe not every day of the week. [laughter] david: ok. kevin: you still get hit like in
9:03 pm
sports. games a year with earning calls. david: what year did you start under armour? kevin: 1996, about a mile from where we are now. david: did you ever think you would build one of the biggest athletic apparel companies in the world? -- i neverver had believed we couldn't do that. ifn i started, i don't know people begin with this massive vision at 22 years old or 23 belief was to my sell the world's greatest t-shirt for football players to wear under their paths. from there, why don't we make the best shirt for football players. what if we made longsleeve shirts. what if we made something for cold weather, warm weather? it is one product at a time to satisfy a need. david: you grew up in
9:04 pm
kensington, maryland, suburb of washington. he decided you would not be an academic star, but might be enough x start. kevin: i believed i could do both. [laughter] david: you were a good football player. kevin: i was a good high school football player. david: what position? kevin: fullback and linebacker. david: you were ready to get a division i football scholarship them up at the division i is not ready to give you one. kevin: correct. david: you went to the university of maryland and walked on the team. kevin: i disagree with that assessment. [laughter] kevin: i went on the team. david: you played all four years? kevin: i did. david: how many people walk on and play all four years, is that common? kevin: i think they made a mistake. i think they should have a scholarship. david: i thought the same thing didn't work out. i should've all gone.
9:05 pm
kevin: now you can qualify. [laughter] david: when you graduated come it in the fell did not draft you. kevin: no, i had to make other plans. david: they do mistake and didn't draft you. kevin: they were right. [laughter] david: what did you decide to do? you wanted to build a company, but where did the idea come into your head about a t-shirt better for a football player? everyone hady viewed apparel in the past is that it is just another t-shirt, versus a piece of equipment. i thought there was a way to make a piece of equipment to enhance your performance and make it better. about the did you go idea of designing something that would do what you wanted it to do? where did you go? kevin: i went to a fabric store and brought in a piece of women's lingerie and said he make anything like this with
9:06 pm
this synthetic, stretching material. i said what if you make that for the upper body. the woman at the store handed me a bolt of fabric and i bought what she had. i took this fabric to a local tailor in maryland and brought t-shirt and said sir, can you make me as many t-shirts out of this fabric? seven prototypes later, i took them back to my teammates. they tried them and like them. david: they made the t-shirts for you. how did you sell it? the players in maryland said they loved him, where could they get more. i knew i needed to learn how to manufacture. i read about the garment district in new york city. i got in my 199240 explorer and drove up, parked my car, and found a place to buy fabric. i found a place it could
9:07 pm
manufacture, then i made five and shirts. david: and your car was still there when you came back? [laughter] kevin: no, it was actually towed. [laughter] david: ok, all right. you have the garment being manufactured, then your job is to go on the road and sell it to athletes or teams. was that hard? 48000 and 51,000 miles on my car, then i started flying around. that is a lot of miles. david: you are the youngest of five brothers. did your older brother say you are crazy, go get a job? kevin: a little bit of that. not really that nice. [laughter] kevin: i had a tremendous amount of support. my family was great. everybody had their own thing. under armour wasn't obvious. people started, called, tripped over the name. what is that thing you are
9:08 pm
doing, under arm. david: where did you get your investors? kevin: i had $17,000 in startup capital, then just friends and family. there were moments of selling of percent in the company for $5,000, whatever we could do to get the company started. david: what other part x -- products did you build. kevin: we let the consumers lead us. the first was a t-shirt for the summer, then all of a sudden can you make something for long shorts? long sleeves, then you have this ethos that becomes the brand that translates to every product we build and becomes the essence and that consistency and continuity is what brand is. david: canon an athletic shoe make me run faster? kevin: it is all relative. david: i'm sure i could run faster if i ate less. that is not the major factor. kevin: it will just encourage
9:09 pm
you. david: what about great athletes? , it can helpn shoe sell the shoe. to get these athletes to do this , you have to pay the money, right? they don't do it for free. kevin: it's nice when they love the brand, love the product. jordan is a great example of an football,layed baseball, basketball, and that is why he wanted to sign with our brand. stephen curry came to us. contract with nike, then switch to under armour. david: how did he pick under armour over the others? kevin: his three-year-old daughter at the time made the decision. stephen curry had offers from all three brands. he was the seventh pick in the draft. three years have gone by and he did not feel he was getting the love from the brand he was with at the time. on top,hree shoeboxes
9:10 pm
each issue we had for him. he said, tell me what you think to his daughter. she got up and hobbled over there and picked up the first , looked atdidas shoe it, and threw it over her shoulder she walked over to the second -- shoulder. she walked up to the second, the nike shoe, threw it over her shoulder. she walked over to the under armour shoe and said, this one, daddy. david: wow. did you have to pay her? kevin: not a bad idea. but itld be fashionable, is great if it increases your blood fall -- flow and helps your muscles recover faster platoon greater shape for tomorrow. david: i feel the blood flowing already. ♪
9:11 pm
9:12 pm
9:13 pm
children or young adults are buying athletic equipment or apparel, they might be induced to do so by michael jordan. ,or somebody my age or older are they going to be induced to buy something because michael jordan endorses it, or it really does work for people like me? kevin: are we targeting you? our mission statement says to make assets better. is when you can outfit the best and care about every nuance of of a product, that builds credibility. it's nice to know it is the very best and they are performing at a higher level. perceptione is a these products are made in asia, at the same kind of places, and these people are paid low wages,
9:14 pm
and in the end, the same factory makes things for all manufactures, is that true or not? kevin: the global manufacturing process is critical to growing and creating second world and first world economies. china, you have watched the elevation of the minimum wage. i made my first trip to china in 1999. it was the hot manufacturing bed. today, it is the number three tier one city in china. it has been that transition through manufacturing. it is all relative. this is something we take great evaluate we do when we they meet the standards and deliver the things the way we want them to. david: sometimes her products are made in the united states? kevin: of course. david: let's talk about baltimore. you are from the washington suburbs. why did you decide to locate that quarters in baltimore, my
9:15 pm
hometown, great city, but not a natural place to locate that orders -- the headquarters? kevin: there was something about the city that was appealing to me. , itved there in august 1998 felt like the grit of baltimore, this lunch pail, work boot, chip on your shoulder, and that is what i wanted the brand to be. there was a reflection there. the second was being youngest of five boys and i had a lot of history in this town. was nice to get a fresh start in baltimore. david: how many employees do you have around the world? kevin: 14,000. david: how many are in baltimore? 3005 hundred, four thousand between corporate and one of our main warehouse is. david: you have been very involved in philanthropy. costou outfit at your own the athletes of all the
9:16 pm
baltimore city public schools. is that right? kevin: the unique thing about under armour this we have the ability to connect with kids in a way that other brands don't. a bank or insurance company, it is nice, but kids want to be around our brands. the things we do is every one of our teammates contributes 32 hours a year, and we have something where we put 12,000 hours where we put man and woman power together to transform three middle schools in baltimore city. are put through summer program, tuition assistance, education in college, and other things, the ability to affect lives that need another opportunity are some of the things we are taking on and trying to make a difference in baltimore city. david: the first day the stock goes up 100%, then for roughly
9:17 pm
26 consecutive quarters your revenue went up 20% a quarter. that is very unusual to keep going up that way. at what point did you relation can't keep doing that? kevin: we had a great run from 2010 through 2016, roughly. with that kind of growth, it was something that had never been seen in consumer retail before. million,e crossing 500 one billion faster than any other brands had done in our space. billion,rom 2.32 $4.8 more than double the size of her company in three years. that treats all kinds of strain. this is not just software that leverages out the backside. it is infrastructure, boxes, buildings, a lot of things, we made a great run. david: your market value is $9.5 billion, more or less. it was double that at one point.
9:18 pm
when it started going this way, did you think you have to reinvent your company? ,evin: i think every company every great company, every great brand will come to a crossroads where they have to decide. that is something we have taken on with the transformation. a lot of restructuring, reorganization. we had to redo some risks in our company. it made us a better and stronger company. david: you are not in the athletic equipment business, like some of your competitors, nike. why are you not in that business? you are in the apparel business. kevin: lower margins, not as compelling of an attraction. our footwear is not just another shoe. it is a shoe that comes with an app that will coach you to make you better. and cool,be stylish but what makes it great is that jacket is lined with material
9:19 pm
that helps increase your blood flow and helps you recover faster and puts you in better shape for tomorrow. [laughter] david: i am feeling the blood flowing already. [laughter] david: in china, i sometimes see knockoffs of american goods and so forth. are there knockoffs there that you have to worry about or is that not a problem? kevin: we have had several lawsuits. you are striving for that moment where people want to knock you off and then all you want to do is protect yourself. we have had some crazy lawsuits that have gone back-and-forth. they have resolved and the chinese courts have been great to us. david: the culture of your company, you were in the news yourtly for the nature of inclusion and not including certain people in your company. -- canress the culture you address the culture issue? kevin: the first thing i wanted to do was build a house, a great house. as you grow, you realize that house becomes a building, tall
9:20 pm
building. for any entrepreneur, the first thing is as a ceo, i am fully responsible for everything that happens in the company. what i am required to do and where i am accountable for the actions we take when bad things happen. i think we have been incredibly proactive when it comes to issues that arise and it is something that will happen in any organization of 14,000 plus, so we will continue to invest into our culture and make sure it is inclusive, diverse, equaling that is an opportunity for anyone who was to join our brands, and we encourage that. that is not just simply a statement. david: what is the outside pleasures you really enjoy? kevin: i love driving home, parking my car, walking next door to where my kids go to school, watch my children play football or hockey. it is not easy being our kids.
9:21 pm
our kids are required to only where under armour all the time. [laughter] ♪
9:22 pm
david: let's talk about the athletes. when you sign an athlete, is it an arduous process? kevin: you have to work to have the best, but athletes are different today. trying to relate with a twentysomething year old, you want to make sure you are speaking to them. they understand they are a brand. they arerstand what bringing to the table and what their market value is, and they protest that. the way to win these athletes is not always through the front door. if you are waiting at the negotiation table, you will
9:23 pm
lose. when we signed stephen curry, there was a guy who was an unsigned free agent who happen have his locker next stephen then weo we sign him, loaded him with products on a daily basis, and it was the thing where his job was to help us on stephen curry, then eventually stephen curry just said if they take care of you this welcome, imagine what they would do for me. [laughter] kevin: he helped him with the understanding. you have to play chess and not checkers. david: one of your products is pajamas. now, is that an athletic thing, or what is that? kevin: what makes under armour unique is the style, fit, and moisture management. consumer actually wants or deserves more. tom brady brought to us this idea of selling it.
9:24 pm
the way he has played into his 40's is because he actually when he recovers, bruised knee, elbows, he uses this rap. you have seen copper bands and other things out there, but this is fda proven to increase blood flow, which increases the speed you can recover, so you kenexa comeback that much better. he asked if we could do a pajama line. we introduce that. what if we actually put it into their activewear. one of the things we will be isnching in spring 2019 including this recovery material into what you do. david: you have a white chalk board in your office and right things there. is that the we teach, encourage, motivate people? kevin: i have kept it since i started.
9:25 pm
as a athlete, this is where they would keep depth charts. we have always captured the spirit and essence of the brand. to say things like overpromise and deliver, dictate the tempo, things like trust. it is built interop's and lost in buckets. that requireings the dna of what is under armour. david: you have built a great earned a great deal money, so what do you do when you are not working? what are the outside pleasures you really enjoy, other than interviews like this? [laughter] kevin: i love driving home, parking my car, walking next door to where my kids go school and watch my children play hockey or football. i have a terrific family and i am fortunate for that, and to have the ability to watch it play out to the eyes of kids, it
9:26 pm
is not easy being our kids. of course, my kids are required to only where under armour all the time. david: suppose they wear nike? what would happen? kevin: that would be bad. [laughter] david: they wouldn't perform as well either. kevin: i'm like, don't ever wear them. david: when you were an athlete, you are not a superstar athlete, but now the people on your team who are better athletes come to you for jobs? kevin: that happens sometimes. is one of the most important training grounds. i would not be doing under armour if it had not then for playing the sport and had been learntball, but also you understanding. football is a game that has great pressure on it right now, but the lessons learned and america without football would
9:27 pm
be less than america with football. come: they were athletes and they can endorse, so people might follow my endorsement. you might think about that. kevin: that is a small market. [laughter] kevin: big opportunity for a high average order value. david: thank you very much. [applause] ♪
9:28 pm
9:29 pm
9:30 pm
♪ francine: nestlé is the biggest food company in the world with products in 191 countries. the company has 2000 brands, while the products transcend countries and cultures, and often tailored to local tastes. what type of leader does it take to oversee such a company? today on "leaders with lacqua," we meet paul bulcke, the chairman of nestlé. paul bulcke

8 Views

info Stream Only

Uploaded by TV Archive on