Nike To Divest Cole Haan, Umbro Brands |
| Wall Street Journal - May 31, 2012 |
Nike Inc. (NKE) said it plans to shed its Cole Haan and Umbro brands, the first planned divestitures in roughly four years, as the athletic gear maker focuses more on its namesake and other key brands.
Financial terms and potential buyers weren't named, though the divestiture process will begin immediately and is expected to be completed by June 2013, Nike said.
Nike said it sees greater potential to speed profit growth through the namesake brand, as well as the popular Jordan, Converse and Hurley brands. The planned sale comes as Nike is in the midst of a strong athletic-footwear cycle and as new product launches such as the Nike+ FuelBand have helped the company remain relevant as consumers are cautious about spending.
Cole Haan, which specializes in casual and dress leather shoes and bags, was acquired by Nike in 1988 for $80 million, plus the assumption of $15 million in debt. The company bought soccer gear and apparel company Umbro in 2008 for $565 million. In fiscal 2009, Nike took a $401 million impairment charge to reduce the carrying value of Umbro's assets, as projected future cash flows fell below the level Nike expected at the time of the acquisition.
Umbro and Cole Haan make up a relatively small portion of Nike. Both brands are listed under "other businesses" along with Hurley, Nike Golf and Converse, contributing roughly 13% to Nike's $17.7 billion in sales for the first nine months of the latest fiscal year.
Read Full Article from Wall Street Journal
- Posted: 2012-05-31 12:47:09
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