With an agreement "announced Friday to sell its Cole Haan subsidiary,
Nike is poised to move on to bigger and better things," according to
Allan Brettman of the Portland OREGONIAN. It can probably "be summed up
in terms of geography: China, Europe and Brazil." Analysts said that
given the "challenges the company faces in the year ahead as well as
opportunities down the road, Nike's focus is likely to be on those three
key geographies." Nike also is selling Cole Haan "because the dress
shoe company was never quite a comfortable fit with the sporting good
company." The analysts said that with cash "freed from the Umbro
and Cole Haan sales, Nike will be able to spend it in areas that make
more sense." But that likely "would not include another acquisition."
Cole Haan is being sold to Apax Partners for $570M, which is around $70M
more "than the amount bandied about in the financial media." Nike
purchased Cole Haan for $95M in '88. Susquehanna Int'l Group athletic
footwear analyst Christopher Svezia said that China "undoubtedly is
commanding Nike execs' attention for slowing sales and growing
inventory in an important region for future growth." Nike has "its
sights set on Brazil: the 2014 World Cup in 12 Brazilian cities and the
2016 Olympic Games" in Rio de Janeiro. Morningstar analyst Paul Swinand said, "The
big question is why (Nike) ever thought it would be a good idea to own a
brown shoe company" (OREGONIAN, 11/17).
