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SBD/June 1, 2012/Marketing and Sponsorship
Nike Selling Umbro, Cole Haan Brands To Focus On Growth Of Nike, Other Sport Brands
Published June 1, 2012
TIMING IS EVERYTHING: In Portland, Allan Brettman writes, "While the decision to sell appeared to make sense, the bigger question may be why the company acquired either Cole Haan or Umbro in the first place." Prior to buying Umbro, Nike's "presence on the greater soccer pitch had been viewed with some skepticism." Sterne Agee analyst Sam Poser said, "Umbro was a good idea before they had fully developed the Nike soccer business. Now that they've fully developed Nike soccer, Umbro detracts from their business." Brettman writes the timing of the Umbro announcement "is curious as one of the two major sporting events of the summer -- the European Football Championship -- will get underway next week." Nike "has been building anticipation for both with major marketing campaigns; how Umbro figures into the mix remains to be seen" (Portland OREGONIAN, 6/1). Susquehanna Financial Group analyst Chris Svezia said, "They really haven't done the best job on execution with acquisitions. Nike bought Umbro at the peak of the market, they've already taken a writedown, it's not a profitable business, so why bother keep throwing money at it? They are looking to cut their losses and move on." BLOOMBERG NEWS' Matt Townsend noted the Umbro acquisition "took a wrong turn, about a month after it was announced, when the England national soccer team failed to qualify for the 2008 European Championships finals, causing a decline in sales." Umbro "has the sponsorship" through '18 and Nike "declined to comment on the future of its relationship with England." SportsOneSource analyst Matt Powell said that Nike "never figured out how to make Umbro into more than a middle-tier brand." Umbro and Nike also "competed against each other because they had many overlapping products" (BLOOMBERG.com, 5/31). Nike said that its decision "was not in response to an announcement in April by Adidas, which said it planned to drop a quarter of its products to improve profitability" (AJC.com, 5/31).