Nike to sell off Umbro

Nike, the world’s biggest sportswear company by sales, is to sell off its Umbro and Cole Haan brands over the next 12 months to focus on driving revenues for its biggest brands.

nike

The deals are expected to be concluded by the end of May after which the company intends to ramp up investment for its Nike, Jordan, Converse and Hurley brands.

Mark Parker, president & chief executive of Nike, who will lead the process, says the company generates better returns from the Nike brand and plans to work on how its three other brands can compliment its sales.

Nike acquired Manchester-based Umbro for £285m in 2008 as the company sought to boost its football revenues. However, Umbro failed to become a significant player in Nike’s portfolio of brands with revenues of $276m (£180m) in 2006 falling to $224m (£146m) last year. In the UK, retailers such as Sports Direct and JD Sports have continued to discount the brand’s products over the years.

The acquisition was affected by the England football team’s failure to qualify for the 2008 European Champion finals which caused a decline in sales at the time. Umbro has a sponsorship deal with the FA until 2008, however it was replaced as the kit manufacturer of Manchester City last month by Nike.

Cole Haan, which makes leather bags as well as shoes, saw revenues up 12% to $518m (£338m) year-on-year for the year to December 2011. The business has 190 stores worldwide, with a strong presence in the US. The brand was acquired in 1988.

In April, Nike’s biggest competitor Adidas announced plans to cut its product roster by a quarter to boost revenues. The company is the market leader in the soccer market by sales, and has predicted sales of its soccer-related sportswear this year to generate more than €1.5bn (£1.2bn).

Nike’s announcement follows a spate of divestments in recent years. Four years ago, the company sold the Starter apparel brand to Iconix Brand Group for $60m (£39m) after purchasing the label in 2006 for $43m (£28m). It also sold the Bauer hockey brand in 2008.

Nike’s third-quarter revenues were up 15% year-on-year to $5.8bn (£3.7bn).

Latest from Marketing Week

PLEASE SIGN IN OR REGISTER. IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and inspiration that will help you develop as a marketer and leader.

Register and receive the best content from the only title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work, so we can make Marketing Week more relevant to you.

Register now

THE BEST CONTENT

Our award winning editorial team and columnists will ask the biggest questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we will be your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Dedicated to developing your skills and helping you achieve marketing excellence. Find guidance on leadership, professional development and the latest industry jobs.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here