Under Armour ousts two executives after review of expenses
Company questioned spending practices in sports-marketing unit
Under Armour Inc. ousted two sports-marketing executives who were longtime associates of CEO Kevin Plank, according to people familiar with the matter, after the apparel brand conducted an internal review of their department’s spending.
Ryan Kuehl, senior vice president of global sports marketing, and Walker Jones, senior director of sports marketing, were both removed from their roles last week, the people said. Employees were informed of their departure on Thursday, but no reasons were given for the abrupt changes, employees said.
Behind closed doors, the company’s management questioned the way the two men had been running the sports-marketing department and whether some of their spending was appropriate, some of the people said.
The funds at issue included events, gifts to athletes and nights out, the people said, and some were costs that were approved in previous years.
“Per company policy, we do not comment on specific personnel matters,” an Under Armour spokeswoman said.
Both men first joined the Baltimore company years ago and were part of Mr. Plank’s inner circle, helping to recruit athletes to endorse products, said current and former employees.
Mr. Plank started the business in 1996 with a sweat-wicking shirt for football players and built it into a global brand with $5 billion (U.S.) in annual sales.
Mr. Kuehl, a former player in the National Football League, was hired at Under Armour in 2009 as a director in sports marketing, where he later recruited golfer Jordan Spieth. In 2016, he was promoted to lead the department, making him responsible for approving expenses and deciding how to allocate funds.
Mr. Jones, who joined Under Armour in 2007, left the company in 2014 after questions about his spending, according to people familiar with the matter. He left to work as a sports agent at Creative Artists Agency. Two years later, Mr. Plank lobbied executives to let Mr. Jones return, prompting his rehiring in 2016, these people said.
The company has for years given a long leash to the sportsmarketing department, with Mr. Plank himself holding lavish corporate events for athletes and VIP guests and often telling executives to give in to the demands of athletes, even those who are no longer useful to the company, these people said.
The sports-marketing staff were among the employees who sometimes attended strip clubs with athletes and expensed the visits to the company, the people said. Under Armour stopped the practice in February, The Wall Street Journal reported last month. Some employees said the strip-club visits were symptomatic of a company culture that was demeaning to women. They said many top roles at the company were long held by Mr. Plank’s friends and women didn’t have a fair shot at promotion. Under Armour previously said it doesn’t condone conducting business at strip clubs, has taken steps to make its workplace more inclusive and addressed allegations of inappropriate behavior by former male executives.
After years of rapid growth, Under Armour’s sales hit a wall in 2017 and the company responded by restructuring its operations and reining in its spending. In a Feb. 20 email to staff, the company’s finance chief, David Bergman, said it could no longer reimburse employees for adult entertainment, limousine services and gambling, according to the email, which was reviewed by the Journal.
Under Armour also eliminated hundreds of headquarters jobs, streamlined its product selection and cut some sponsorship deals. Mr. Plank brought in an outsider, Patrik Frisk, as president and operating chief in mid-2017 and several top executives have since left.
“As we work to close out the second year of this transformative chapter, as we work to protect this house, we are steadfast in the challenge of becoming better at every turn,” Mr. Plank said on an earnings call on Oct. 30.
He promised to update investors on the company’s strategy and long-term outlook at an event on Wednesday.