Wall Street Journal Article November 2018

Credit: Wall Street Journal 


Under Armour's #MeToo Moment: No More Strip Clubs on Company Dime; 'We can and will do better,' says chairman and chief executive of sports-apparel company


By Khadeeja Safdar


Nov 5, 2018 3:36 p.m. ET


Copyright 2018 Dow Jones & Company, Inc. All Rights Reserved.


Under Armour Inc. employees received an email earlier this year that upended a longstanding company practice: They could no longer charge visits to strip clubs on their corporate cards.


Over the years, executives and employees of the sports-apparel company, including Chairman and Chief Executive Kevin Plank, went with athletes or co-workers to strip clubs after some corporate and sporting events, and the company often paid for the visits of many attendees, people familiar with the matter said.


Strip-club visits were symptomatic of practices women at Under Armour found demeaning, according to more than a dozen current and former employees and executives.


Some top male executives violated company policy by behaving inappropriately with female subordinates, some of these people said. Women were invited to an annual company event based on their attractiveness to appeal to male guests, people familiar with the matter said.


In response to questions from The Wall Street Journal about the incidents and the company's culture, Mr. Plank said in a statement: "Our teammates deserve to work in a respectful and empowering environment. We believe that there is systemic inequality in the global workplace and we will embrace this moment to accelerate the ongoing meaningful cultural transformation that is already under way at Under Armour. We can and will do better."


The company, with a workforce of about 14,000, is one of many grappling with concerns about the treatment of women in the workplace, particularly since the #MeToo movement took hold last year.


Kelley McCormick, senior vice president of corporate communications at Under Armour, said the company doesn't condone use of adult entertainment for business, and Mr. Plank didn't conduct business at strip clubs or use company funds at such venues.


The 46-year-old Mr. Plank, who played football at the University of Maryland, has been CEO since he founded Under Armour in 1996 with a moisture-wicking shirt. The company grew rapidly into a global brand with nearly $5 billion in annual revenue last year and a roster of big-name endorsers, including National Basketball Association star Stephen Curry, golfer Jordan Spieth and skier Lindsey Vonn.


Along the way, current and former executives said, many powerful roles at the company's Baltimore headquarters were held by friends of Mr. Plank, and some women said they didn't feel they had a fair shot at promotion.


"The industry has a problem, but Under Armour is truly culturally anemic," said Drew Greer, a former Under Armour vice president who said he previously worked at Nike Inc. for 14 years. He said he was one of the few black men in a senior role at Under Armour in 2015, where he worked for six months.


One of the company's earliest employees was Scott Plank, Mr. Plank's brother, who was a high-ranking executive until he left in 2012 amid allegations of sexual misconduct, according to people familiar with the matter. At the time, Under Armour said he retired as executive vice president for business development to focus on a real-estate venture and philanthropy.


Scott Plank referred questions to a spokesman, who wouldn't provide comment.


Kip Fulks, Under Armour's co-founder and a longtime executive, had a romantic relationship with a subordinate, a violation of company policy, a person familiar with the matter said. The company found out after he informed Under Armour's human-resources department, the person said.


Mr. Fulks then stepped down from his role as chief product officer and was named a strategic adviser in May 2017, while continuing to report to Kevin Plank. The company didn't give a reason for the change, which it disclosed in a securities filing. In October 2017, Mr. Fulks left the company to go on a sabbatical.


Mr. Fulks didn't respond to requests for comment.


"We have addressed these serious allegations of the past and will continue to address workplace behavior that violates our policies," Ms. McCormick said. Mr. Fulks and Scott Plank "no longer work here and we have no further comment," she said.


Former employees said one annual event in particular illustrated some of the problems at Under Armour. Kevin Plank for several years hosted a party for executives, athletes and VIP guests at his horse farm in Maryland on the eve of the Preakness Stakes.


Though invitations were usually limited to executives, company event managers invited young female staffers based on attractiveness to appeal to male guests, according to former employees—a practice the event managers called "stocking the pond." Some people who attended last year said they were uncomfortable because the company had brought in go-go dancers wearing cutoff shorts and midriff tops.


Mr. Plank didn't hold the event this year. "This characterization misrepresents the tasteful nature of the annual Preakness party, which included teammates and significant others, partners, athletes and public officials," Ms. McCormick said.


In a Feb. 20 email to staff, Under Armour's finance chief, David Bergman, said the company would no longer reimburse certain expenses, including adult entertainment, limousine services and gambling, according to the email, which was reviewed by the Journal.


One venue popular with some employees was the Scores club, featuring nude dancers, near downtown Baltimore and a short drive from Under Armour headquarters. On some visits, employees charged hundreds of dollars there to the company, according to some of the people familiar with the matter.


"The use of company funds for adult entertainment is not tolerated," Ms. McCormick said, adding that the February policy change ended a "legacy issue."


Under Armour said women make up nearly half of its workforce and hold a third of positions at the director level or higher.


Last month, the only woman in the C-suite, human-resources chief Kerry Chandler, announced she was leaving to join Endeavor LLC, a sports and entertainment company. Under Armourtold the Journal its interim HR chief would be a woman.


Several other high-ranking women have left Under Armour over the past year for other opportunities, including Susie McCabe, who was senior vice president of global retail, and Adrienne Lofton, who was senior vice president of global brand management.


Rival Nike earlier this year ousted several executives and promised to overhaul its human-resources department after internal complaints, led by a group of women employees, about inappropriate workplace behavior, lack of diversity in leadership and concerns about women's pay and promotions.


"Growth at Under Armour is a constant journey, especially as it relates to our culture," Ms. McCormick said. "Engaging diverse talent, building inclusive leadership and fostering an equitable, innovative and respectful culture is very important to us."


- Scott Calvert contributed to this article.


Write to Khadeeja Safdar at khadeeja.safdar@wsj.com