Shares of Under Armour Inc. (UAA) were down 3.3% on Tuesday, Nov. 6, after The Wall Street Journal reported that employees received an email earlier this year that upended a longstanding practice: They could no longer charge visits to strip clubs on their corporate cards.
Citing people familiar with the matter, the Journal reported that executives and employees of the sports-apparel company, including Chairman and CEO Kevin Plank, went with athletes or co-workers to strip clubs after some corporate and sporting events, with the company often footing the tab.
Kelley McCormick, senior vice president of corporate communications at Under Armour, told the Journal that the company doesn't condone use of adult entertainment for business, and Plank didn't conduct business at strip clubs or use company funds at such venues.
The news came as numerous other companies and high-profile executives grapple with allegations of sexual misconduct and general impropriety in the workplace. Workers at Alphabet Inc.'s (GOOGL) Google staged a global walkout a week ago in response to what they viewed as inappropriate responses to allegations of sexual misconduct.
According to the Journal, 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. Women were invited to an annual company event based on their attractiveness to appeal to male guests, people familiar with the matter told the Journal.
In response to questions from the Journal about the incidents and the company's culture, 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."
Shares of Under Armour have posted double-digit percentage gains this year on expectations that the maker of sports and leisure wear was recouping lost market share.