- Under Armour has entered into a definitive agreement to sell MyFitnessPal
- It is also planning to sell another fitness app, Endomondo
- UA will continue operating MapMyRun and MapMyride apps
- The decision may be due to aggressive market competition by the likes of Apple
Under Armour is selling its MyFitnessPal to investment firm Francisco Partners. Under Armour is a global leader in branded athletic performance apparel, footwear, and accessories. It has entered into a definitive agreement to sell the MyFitnessPal platform. It will be sold under the deal at $345 million. According to the company executives, it is part of a turnaround strategy and payoff strongly.
About Under Armour
Based in Baltimore, Maryland, Under Armour is a leading inventor, marketer, and distributor of athletic performance apparel. Its innovative products and experiences are designed to help advance performance and make all athletes better. It is powered by one of the world’s largest digitally-connected fitness and wellness communities. The move to sell MyFitnessPal was triggered when it generated better than expected results by Sept. 30. Under Armour has also announced the closure of another of its fitness apps, Endomondo, by the end of the year.
The company will continue to operate the MapMyRun and MapMyRide apps. These apps are under the MapMyFitness platform, which is part of its digital strategy. According to Patrik Frisk, president and CEO, the company aims at investing heavily in online commerce and company-owned retail outlets. But it is simultaneously planning to reduce the number of stores selling its apparel and footwear.
The MyFitnessPal app has over 200 million users. It was acquired for $475 million, about five and a half years ago. The app along with Endomondo aimed at casual users who were starting their workout plan. But a number of reasons may be the cause of their closure. One of them could be diminishing value in this segment over the long term. Another is Apple’s aggressive targeting of entry-level fitness users. Apple has recently expanded its Watch hardware and Health software offerings.
Under Armour managed to excel in the Wall Street analysts’ expectations. It reported sales worth $1.4 billion, as compared to $1.13 billion projected. Its wholesale revenue from sales to retailers dropped by 7% during Q3 2020. But the sales from online and company stores rose by 17%. The company reported an income of $39 million. Its share increased by 9 cents, beating analysts’ forecast by 4 cents.
It might be expected that self-guided fitness share to expand given the pandemic related restrictions. But Apple’s aggressive offerings of low-cost subscriptions and growth of other home workout platform