Under Armour Addresses Report Detailing Strip Club Visits on Corporate Cards

Following a scathing report in the Wall Street Journal that made known a years-long practice of expensing visits to strip clubs on corporate cards, Under Armour has sent out a letter to employees explaining that it would accelerate a change in its company’s culture.

In the letter obtained by FN, CEO Kevin Plank and president Patrik Frisk informed employees late on Monday that the WSJ story, published that afternoon, was “tough to read.” The article revealed that, over the years, executives and employees at the athletic company joined athletes and co-workers at strip clubs after corporate and sporting events. The company reportedly paid for these visits, WSJ said, citing people familiar with the matter.

“This is not the culture we envision for Under Armour,” Plank and Frisk wrote in the memo.

The WSJ report also stated that female employees of the sportswear firm described these actions as “demeaning,” with a number of top male executives allegedly violating company policy “by behaving inappropriately with female subordinates.” Women were also reportedly invited to an annual corporate event “based on their attractiveness to appeal to male guests.”

Kelley McCormick, SVP of corporate communications, said in an email sent to FN: “The company doesn’t condone use of adult entertainment for business,” adding that “Mr. Plank didn’t conduct business at strip clubs or use company funds at such venues.”

In February, employees at the company received an email making clear that Under Armour was ending the practice, along with gambling and limousine services, according to WSJ.

In a statement published by WSJ, Plank said: “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 paper’s investigation, which was based on interviews with more than a dozen current and former employees, comes at a time when the #MeToo movement has spurred reckoning around sexual misconduct, harassment and assault in the workplace.

Nike has also grappled with its own issues: The latest round of accusations came in a complaint filed last month by former footwear developer Cecily Schmidt. She alleged discrimination based on race and sex, as well as a hostile work environment, retaliation for reporting unlawful conduct and violation of family medical leave laws.

Schmidt’s case follows a dozen executive departures at the Swoosh this year after The New York Times in April revealed alleged widespread sexual harassment at the company, which employs around 70,000 staffers. That same month, Nike admitted that it had “failed to gain traction” with women and minorities. In July, it announced a plan to raise salaries for 10 percent of its workforce in an effort to correct pay inequity.

Under Armour’s memo yesterday detailed the firm’s commitment to enforcing policies that help improve the workplace, providing safe and confidential channels to identify inappropriate behavior and addressing such behavior “swiftly and resolutely.”

“You deserve to work in a respectful and empowering environment,” the memo stated. “Inappropriate behavior that challenges our values or violates our policies is unacceptable — and will not be tolerated. We believe that our diversity and collective decency will drive our future.”

The brand has recently made a push to focus on female athletes. It not only launched a line with ballerina Misty Copeland earlier this year, but also introduced its “Unlike Any” campaign, which showcases an eclectic group of all-female ambassadors.

In June, FN spoke with two high-ranking female executives at Under Armour — chief human resources officer Kerry Chandler and Adrienne Lofton, SVP of global brand management — about #MeToo and the stereotypes faced by female leaders. Lofton has since left the company, while Chandler announced last month that she was leaving to join sports and entertainment company Endeavor LLC. (She was the only woman in the C-suite at the time.)

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