NIKE SELLS UMBRO SOCCER UNIT

Nike Inc. is selling its Umbro sports apparel and footwear unit to Iconix Brand Group Inc. for $225 million. The deal, which was announced this October, is expected to be signed before the end of the year. Experienced purchasing officials of athletic gear for ball clubs who buy soccer uniform each season will certainly recognize Umbro as an iconic sports brand. Based in Manchester, England, it has a heritage that dates back to its foundation in 1924. Umro’s early successes included the football kits it tailored for Manchester when this legendary soccer team won the 1934 FA Cup. Umro also counts as a long-time supplier of the team soccer uniforms for England’s national team.

Nike, based in Beaverton, Oregon, is as iconic as Umbro, having earned its worldwide reputation initially from running gear and later to apparel and equipment for other sports disciplines including those for soccer training and soccer coaching. Nike acquired Umro in 2008 for about $500 million, a move that was described as a “dynamic alignment” that opened more markets in Europe for the American company and propelled its bid to surpass Adidas as the biggest manufacturer of soccer apparel and equipment in the world. The long-standing deal of Umbro as a supplier for England’s national soccer squad was another big plus for Nike.

However, Nike’s expectations on the U.K. soccer apparel maker didn’t pan out as Umbro’s sales revenue dropped by about 19 percent between 2006 and 2011. Business analysts attributed the decline to the diminished role Umbro had in the Nike–Adidas competition in the market for soccer uniforms, related football gear, and soccer equipment. The impending Umbro sale, according to Nike CEO Mark Parker, is part of his company’s initiatives to focus corporate efforts on businesses units having the optimum potential in growth and profit generation.

Earlier, Nike also announced its intention to divest of its interest in Cole Haan, its unit involved in the manufacturing and selling of dress shoes. Nike likewise acquired and then sold hockey gear maker Canstar Sports and the Starter apparel brand.

Parker said that while his company recognizes Umbro’s great heritage, Nike believes it can serve footballers both on and off the soccer field with its strategy shift to focus on pushing growth in its Nike, Converse, Jordan, and Hurley brands.  The Nike and Converse brands, notably, have some football gear in their respective product lines which too are popular for youth soccer and soccer training.

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