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The Founder of Under Armour Has Big Plans for 'Made in the USA'

June 05, 2017

In honor of Small Business WeekInc. reporters deployed to several cities where they spent one day talking to owners and entrepreneurs in a particular sector about their challenges.

[Leigh Buchanan] May 2nd, 2017 [Inc.com]

Kevin Plank made a fortune from manufacturing. Now he wants to seed his adopted hometown of Baltimore with manufacturers, replacing urban blight with a city of makers.

Plank, who grew up in suburban Washington, relocated his athletic apparel business, Under Armour, to Baltimore in 1998, where he grew it into a public company with 2016 revenues approaching $5 billion. Once a manufacturing hub, Baltimore over the decades has bled well-paying jobs with the loss of companies like Bethlehem Steel and Proctor & Gamble. Although Under Armour manufactures overseas, Plank believes new technologies and processes can make Made-in-the-USA economically viable again. He is now experimenting with local manufacturing at Under Armour. And he is building an ecosystem of startup manufacturers engaged in the same grand experiment.

The focal point of that experiment resides in Port Covington, a south Baltimore neighborhood where Plank Industries--which manages the entrepreneur's non-Under Armour ventures--is building a new corporate campus and expansive mixed-use development. It is a 133,000-square-foot converted bus depot, prosaically dubbed City Garage. The space, which opened last year, encapsulates the manufacturing journey from inventor to business to industry. "We are looking at how a city like Baltimore, which once competed on manufacturing, can get that back," says Demian Costa, managing partner of Sagamore Ventures, Plank's investment arm. "And in what form does it come back?"

City Garage is divided into three sections. First is the Foundery, a sprawling maker space where members (the monthly fee is $150, with 50 percent discounts for students, disabled veterans, and others) have access to classes and tools for work in metal, wood, glass, textiles, and other materials. "This is where the 22-year-old football player walks through the front door and can turn any idea on the back of a napkin into reality," says Costa.

If the 22-year-old-football player is key to the Foundery's revenue model, a different demographic is key to its mission. The Foundery's nonprofit side provides workforce-development for a population with high rates of poverty and incarceration. The idea is to bridge the skills gap that leaves many of Baltimore's small-to-midsize manufacturers persistently short-staffed, even when unemployment is high.

The Foundery is also meant to inspire nascent entrepreneurs. Already a few members have built prototypes--for example, of a device that makes work on a loading-dock easier--and are running very-small-batch manufacturing out of the space. Eventually, some inventors may move their operations next door, to Main Street, City Garage's unconventional incubator.

Main Street resides along the wide corridor where buses drove in and out during the structure's depot days. Currently 15 companies are housed there, all of which make physical products, such as skateboards, glass fixtures, and high-end luggage. (Not all production takes place at the Garage.) One resident, Ready Robotics, which makes industrial robots, was co-founded by Drew Greenblatt, CEO of Marlin Steel, a Baltimore maker of industrial steel baskets. That collaboration--the robots operate in Marlin's factory, proving the concept while improving Marlin's agility--is an example of the synthesis Plank Industries hopes to foster between City Garage startups and Baltimore's older manufacturing base.

Plank Industries invests in most of the startups and advises them on matters financial, strategic, creative, and operational. Unlike most incubators there is no expectation of quick graduation. "A company that is cool and contributes to the community might be there for a very long time," says Tom Geddes, CEO of Plank Industries. "Another might scale to have too many people, and we'd say you've got to find another space." (The only business to leave so far is Plank's whiskey company, which was parked in the Garage while a distillery was under construction.)

Main Street welcomes makers-at-heart who are content to stay small. But "we really hope to build the next Under Armour," says Costa.

City Garage's third section is the Lighthouse, which unlike the other two is a division of Under Armour. The Lighthouse is an innovation center with the long-range goal of bringing apparel manufacturing back to the U.S.

City Garage is just part of Plank's investment in Baltimore, which also includes housing, retail, a hotel, and a water-taxi service. The consideration of transportation and workforce development suggests a more balanced approach to urban reinvention than, for example, Tony Hseih's Las Vegas venture, which largely relied on big ideas and a creative culture to gain traction. "There are cities in the United States where all you really do need to do is put capital and entrepreneurs together and let the market take care of it," says Geddes. "But there are many other cities--Baltimore included--where if you are going to have a real impact on the residents of the city, you need to take the next step."

Having set things in motion, Plank himself is largely hands-off with the ambitious project that is unfolding around him. Geddes says Plank is "laser-focused" on Under Armour, which is having a rocky year, with its stock price hurt by slowing growth and its founder taking fire for some pro-Trump comments.

With its emphasis on aspiration and work, Plank's vision for the city echoes the underdog strategy that helped make Under Armour a success. "Kevin is a brand guy," says Geddes. "He wants to do things that will have a positive impact on the brand of the City of Baltimore."

 


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