Nike Puts Focus On International Growth After Unloading Cole Haan Subsidiary
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).