Nike sells Umbro to Iconix Brand Group
Nike announces sale of Umbro to Iconix Brand Group
In order to create a greater football product portfolio to increase sales, Nike purchased Umbro for $285 millions in 2007. This allowed Nike to be a stronger competition for Adits and other competitors. By the end of 2007 Nike's collective football sales had reached a total of $1.5 billion.
Another of Nike's objectives for purchasing Umbro was to revive them as a brand, unfortunately they failed to do so in the 5 years that they were under Nike's wing. In 2006 before the purchase, Umbro's sales was $276 million and by 2012 they had dropped to $224 million. May, 2012 Nike announced it would divest Umbro to focus on their own brands success. Nike's CEO Mark Parker stated "IT is difficult to divest any brand but this will enable us to focus on our high potential growth opportunities".
He then added, "Nike had to choose to pursue growth in Umbro or its own football product portfolio", reportedly Nike has $2 billion cash-in-hand so Umbro's profitability was minor in terms of success.
October 24, 2012 Nike announce that they are selling Umbro to Iconix Brand Group, INC for $225 million. Nike lost $60 million from their purchases in the previous 5 years, Iconix brand is owned by Neil Cole, fashion designer Kenneth Cole's brother, it is the second largest global licensing company.
"Umbro is s true, authentic football brand with global, loyal consumer fan base. We are thrilled to be adding them to our portfolio of Iconic brands", Neil Cole (2012), CEO of Iconix Brand Group.
Following the acquisition of Umbro, Iconix's shares increased by 1.7% to $18, 76 per share whilst Nike's decreased by 7% to $92.89 per share. Nike has previously stated the divest of Umbro would have a long-term positive impact on the company, whilst the short-term impact was a significant knock to their market shares and not to mention the controversy that followed.
Nike's lasting words - "Umbro has a great heritage, but ultimately as our category strategy has elves, we believe Nike football can serve the needs of footballers both on and off the pitch".
Another of Nike's objectives for purchasing Umbro was to revive them as a brand, unfortunately they failed to do so in the 5 years that they were under Nike's wing. In 2006 before the purchase, Umbro's sales was $276 million and by 2012 they had dropped to $224 million. May, 2012 Nike announced it would divest Umbro to focus on their own brands success. Nike's CEO Mark Parker stated "IT is difficult to divest any brand but this will enable us to focus on our high potential growth opportunities".
He then added, "Nike had to choose to pursue growth in Umbro or its own football product portfolio", reportedly Nike has $2 billion cash-in-hand so Umbro's profitability was minor in terms of success.
October 24, 2012 Nike announce that they are selling Umbro to Iconix Brand Group, INC for $225 million. Nike lost $60 million from their purchases in the previous 5 years, Iconix brand is owned by Neil Cole, fashion designer Kenneth Cole's brother, it is the second largest global licensing company.
"Umbro is s true, authentic football brand with global, loyal consumer fan base. We are thrilled to be adding them to our portfolio of Iconic brands", Neil Cole (2012), CEO of Iconix Brand Group.
Following the acquisition of Umbro, Iconix's shares increased by 1.7% to $18, 76 per share whilst Nike's decreased by 7% to $92.89 per share. Nike has previously stated the divest of Umbro would have a long-term positive impact on the company, whilst the short-term impact was a significant knock to their market shares and not to mention the controversy that followed.
Nike's lasting words - "Umbro has a great heritage, but ultimately as our category strategy has elves, we believe Nike football can serve the needs of footballers both on and off the pitch".
Comments
Post a Comment