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COVID-19 forces Under Armour layoffs, closure extensions

Kate Sachs reaches for a pair of Under Armour Speedform Apollo running shoes at Charm City Run in Locust Point in 2014. Under Armour wants to sell more products to women.(The Daily Record/Maximilian Franz)

A customer reaches for a pair of Under Armour running shoes at Charm City Run in Locust Point in 2014. (The Daily Record/File Photo)

Under Armour Friday said it is laying off thousands of workers at its stores and distribution facilities because of the impact of the COVID-19 pandemic.

“In these unprecedented and challenging times, the majority of stores where Under Armour is available remain closed, contributing to a significant decline in revenue. … This unanticipated shock to our business has been acute, forcing us to make difficult decisions to ensure that Under Armour is positioned to participate in the eventual recovery of demand,” Under Armour President and CEO Patrik Frisk said in a statement.

While not detailing a precise number, the company said it was temporarily laying off those employees who work at its brand stores and discount outlets as well as 600 workers at its distribution centers.

On March 15, the Baltimore-based company had said it was closing all 188 of its company stores in North America through March 28 as a precaution. On Friday, the company said it was extending the closures indefinitely.

Among those laid off, according to the Maryland Department of Labor, are 154 employees at Under Armour’s distribution facility at Tradepoint Atlantic on Sparrows Point.

At the moment the company is calling the layoffs temporary. It has pledged to cover full health benefits for eligible employees for roughly two months of the time they’re our of work.

Members of the company’s board of directors will have their compensation reduced by 25%. All of the brand’s leaders, at or above the executive vice president level, will also take 25% pay cuts.

Other sports apparel and footwear companies also are struggling — as is the entire retail sector — as most of the nation’s economy has ground to a halt because of the pandemic.

Less then a year ago Under Armour was celebrating the opening of its so-called Omni Distribution House at Sparrows Point. The celebration included appearances by Ravens head coach John Harbaugh and former Ravens linebacker Ray Lewis, who helped amp employees up at what felt like a pep rally.

During the opening ceremony in early May 2019 Rob Bowen, the facilities director, said he expected to ship up to 300,000 items a day from the 1.3 million-square-foot distribution center by the end of the year.

“It will probably be sooner than that because business is booming,” Bowen said during a tour of the facility on Wednesday during a ceremonial opening of the building on Sparrows Point in eastern Baltimore County.

The opening also arrived on the heels of one for the firm’s strongest earnings calls following a string of disappointing years. Under Armour’s apparent rebound, however, turned out to be short-lived.

The company in February, prior to COVID-19 evolving into a pandemic, projected the coronavirus to reduce sales by as much as $60 million.

Friday, as a result of the pandemic, the company said it has withdrawn its full year outlook and will not provide an updated outlook.

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