Sportswear giant Nike behind some of the most impressive soccer uniforms worn by professional teams today, and is about to sign a deal with the English soccer team that’ll increase its brand presence even more in Europe.
According to a news report by the British tabloid Daily Mail, the sports clothing manufacturer has come into an agreement with the English Football Association (The FA) wherein Nike shall replace Umbro as the official kit provider(soccer jerseys, cleats, etc.) of the English soccer team starting next spring.
Once the deal pushes through, Nike will be able to gain a competitive advantage over Adidas, which is currently dominating the soccer market in terms of market share. However, this has raised a few issues which need to be addressed.
First and foremost, it’s a known fact that Nike acquired the Manchester-based sportswear gear producer back in 2007. The main reason why they paid half-a-billion dollars to acquire these soccer uniforms and sports garment manufacturer in the first place was to scale its growing business in the European Market.
During that year, Nike’s move to buy Umbro was heavily influenced by the latter’s strong ties with the English soccer team, as well as the fact that it has been providing numerous high-profile clubs with soccer jerseys plus other soccer getups.
However, since Umbro wasn’t performing as well expected, Nike ultimately decided to put the company up for sale so that it could focus on developing its core brands.
And this is exactly where the conflict begins – potential buyers of Umbro would most certainly be attracted to the brand because of its dealings with the English soccer team. Since Nike will be replacing the company for sale as the official provider of soccer uniforms for the team, its net value would obviously go down, which could turn potential buyers off towards the notion of acquiring the company.
To make things even more difficult in terms of selling the Manchester-based company, Nike also made an announcement last May that it’ll be replacing Umbro as the official sponsor of the Manchester City Football Club starting this 2013/2014 season.
As perplexing as this may seem, other people argue that Nike could make up for the losses with profits raked in from its new deal with The FA (providing them with soccer jerseys and other garments.)Regardless, it’s still going to be tough to pull something like this off.