JJB Acquire Umbro Stake

Sports retailer JJB has today announced its acquisition of a 10% stake in Umbro, the company responsible for the manufacture of football shirts and replica kits for nationwide sale, as well as general sports equipment in a move that will see it cement its foothold in the sale of England national team shirts.

Shares prices were up by around 28% off the back of the purchase, which saw JJB Sports become a significant shareholder alongside Sports Direct amidst rumours that a potential predator may be looking at a takeover of the manufacturing firm which has seen sales slide off the back of poor performances by the England national team.

It had been suggested that sports giant Nike was planning a takeover of Umbro over the coming weeks, in a move that would further tighten the sportswear market after Adidas bought Reebok two years ago. However nothing has as of yet been confirmed by Nike, and indeed no formal steps to takeover have yet been made.

Umbro is currently involved in the supply of football kits to six top flight football clubs in England, including that of the national team. However, with its sales performance intrinsically linked to performance on the pitch, it has seen unpredictable sales in recent times as a result of a faltering England national team.

Additionally the recent bad result against Russia has decreased chances of England qualifying for the European Championships next year, which had an immediate knock on effect in share value which was thought to be the initial attraction towards a takeover.

It remains to be seen whether Nike will launch a bid for the manufacturer over the next few weeks, and indeed whether JJB Sports will be able to leverage its holding in the interim to its commercial advantage.

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