Nike Announce Umbro Success

Sports clothing manufacturer Umbro has today submitted to the approach by sporting giant Nike to acquire its assets and business, worth in excess of £285 million in a deal that will see the world’s largest sports company gain more ground on Umbro’s flagship football shirt market.

UK based Umbro holds the manufacturing contract for the England national team kits, as well as six other top flight English football clubs, spawning a massive secondary market in the sale of replicas to sports fans.

Meanwhile Nike, the world’s most prominent sports brand, have said that the acquisition will allow them to capitalise on that marketplace, which it sees as having strong potential for future growth.

Whilst Nike themselves already manufacture kits for a number of high profile football clubs, the acquisition is set to thrust them to the forefront of the football kit industry, despite the fact that the Umbro brand will remain throughout its takeover.

The move comes after Umbro announced a downturn in sales following the England national team’s poor performance in recent matches, and with a likelihood of further problems should England miss qualification for the European Championships in 2008.

Umbro was previously owned substantially by retailers JJB Sports and Sports Direct, owner of the Sports World chain of retail outlets, totaling around a quarter of the company between them. It had been rumoured for some time that a potential larger takeover bid was around the corner.

The move will see each share sold at 193.06p, a move that newly bought-in shareholders JJB will be all too happy to accept, as a quick turnaround on their investment.

It remains to be seen whether the new ownership can help Umbro weather the potential storm, and indeed whether Nike can leverage the company’s existing contracts to improve its stronghold on the replica shirts market.

Story link: Nike Announce Umbro Success