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Under Armour has fallen into a bit of a rut.
The company, which has taken a hit to sales amid the pandemic, said Tuesday that it will lay off 600 people, according to a memo from CEO Patrik Frisk obtained by Business Insider.
The companhy confirmed it was under federal investigation over its accounting practices in November.
On October 22, the company’s founder, Kevin Plank, announced he would be stepping down from his role as CEO after 23 years. Plank will be replaced by COO Patrik Frisk.
It has had massive problems in the past, including $1.3 billion in leftover merchandise in 2018, shrinking popularity among teens, and a scandal involving executives going to strip clubs and expensing the outings.
We traced the rise and fall of Under Armour, from its early days as a powerful force in the athletic-wear sphere to its current struggles and decline.
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Under Armour is in trouble.
While similar sports retailers like Nike and Adidas are also posting slumping sales amid the impact of the coronavirus pandemic, Under Armour was already sputtering well before the outbreak. Recently, things have taken another turn for the worse.
The Maryland-based sportswear giant said Tuesday that it will lay off 600 people, according to a memo from CEO Patrik Frisk obtained by Business Insider, as it struggles to overcome the effects of the pandemic.
In May, the company said it was working to extend payment terms for its athletes as a measure to cut costs amid dropping sales. In June, the company announced it is terminating its partnership with UCLA, a $280 million deal signed in 2016 and meant to last 15 years. In a statement to Fox Business, the company cited not receiving marketing benefits “for an extended time period” that the company had paid for.
This isn’t Under Armour’s first rough patch. The company has experienced many ups and downs in its over 20-year history. On October 22, its longtime leader Kevin Plank announced he would be stepping down from his position as CEO. The company announced that Plank, who founded the company in 1996, would become executive chairman and brand chief while his CEO duties would be taken on by COO Patrik Frisk.
The company also said in November it was under federal investigation over its accounting practices.
In 2018, the level of the company’s leftover inventory grew 11% to $1.3 billion in the second quarter. That same year, Under Armour executives were embroiled in a scandal that involved going to strip clubs on the company’s dime, a practice that was officially banned in February 2018, The Wall Street Journal reported.
Under Armour announced a turnaround plan to revive the brand in …read more
Source:: Business Insider