Under Armour CEO Kevin Plank has responded to allegations that he borrowed business from quarters in the future to mask slowing demand for the company’s offerings in 2016, according to a report by CNBC.
Plank, who is stepping down as CEO on Jan. 1, said that while the report questions the retail apparel company’s integrity, Under Armour is unaffected and deserves more respect.
“Given recent events that have entered the realm of public opinion without full context, it is disappointing to have our integrity and reputation called into question,” Plank said in a memo sent to employees. “Amid a paradox of being constrained by an ongoing, two and a half year investigation and wanting to address media allegations raised by anonymous sources — our integrity is unshaken. We’ve certainly never claimed to be perfect, but our team has earned and deserves more respect than this reporting currently affords us.”
Under Armour has been under investigation by the Department of Justice and the Securities and Exchange Commission, and the company said it has been cooperating with the probe since July 2017.
There are reportedly emails that show Plank knew about the questionable practices, and although he’s stepping down, he’ll stay with the company as executive chairman. President and Chief Operating Officer Patrik Frisk is going to become the new CEO.
“With respect to inquiries into Under Armour’s business practices by the Securities and Exchange Commission and the Department of Justice, we firmly believe that our disclosures and our accounting practices have been entirely appropriate,” Plank said. “We respect the government’s process and will continue to cooperate with thoughtful and proper resolve.”
Under Armour said it stands behind its company’s financial reporting.
“In this respect, our process for recognizing revenue and recording returns and other allowances has not changed and has always been in compliance with generally accepted accounting principles,” the company said in an official statement.