Under Armour founder Kevin Plank is stepping down as CEO

Matty-Sways

Under Armour rose about 2% after announcement that founder Kevin Plank is stepping down as CEO.

Under Armour founder Kevin Plank is stepping down as CEO.

The Baltimore company said Patrik Frisk, the company’s CCO, will take over as CEO at the end of the year. Mr. Plank will stay as executive chairman and brand chief.

Mr. Plank founded Under Armour in his grandmother’s basement; he started selling sweat-wicking compression apparel and the business took off. He built it into a global brand with about $5 billion in annual sales, but it has struggled in recent years. 

Mr. Plank owns about a 15% stake but controls the company through a special class of stock that gives him 10 votes per share.

After the announcement, shares of Under Armour rose about 2% to $20 in Tuesday’s trading.

Under Armour has struggled to make the jump from start-up to professionalized corporation. Its workplace had issues including strip-club visits and inappropriate behavior by executives. Mr. Plank was also questioned last year by the board about his ties with MSNBC anchor Stephanie Ruhle.

Mr Plank has spoken openly about Under Armour’s shortcomings, vowed to make improvements and replaced some senior executives. The company has said Mr. Plank and Ms. Ruhle are friends; she is one of many friends who offer advice, but the management team makes its own decisions.

“To be completely clear, this is strictly my decision,” Mr. Plank told Fortune.

In recent years, the company has focused on performance attire and improving its operations. Despite changes, it has continued to struggle in its domestic market. In its second fiscal quarter, Under Armour reported a 3% decline in sales in North America and said it expects them to decline over the full year. Nike, meanwhile, has posted strong sales in North America.

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