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Nike Buys British Sports Firm Umbro

Nike announced Tuesday that it has reached a $580 million deal to buy the British sports firm, Umbro. As Kristian Foden-Vencil reports, Umbro may not be a well-known brand in the US, but overseas it’s a legend.

When England hosted the soccer World Cup in 1966, 15 of the 16 teams on the field had their uniforms made by Umbro.

The sports apparel industry has changed dramatically since then — thanks in large part to companies like Nike. But Umbro still provides uniforms to the national teams of England, Ireland, Sweden and Norway.

Charlie Brooks: “Umbro is one of the most historic and authentic football brands in the world.”

Charlie Brooks, is Nike’s spokesman in the UK.

Charlie Brooks: “It was established in the 1920’s up in the Northwest of England, which is historically where the country’s textile industry was based. And it was established making football kits and football uniforms. Back then it was very heavy cotton or heavy knit materials. A real sort of historic feel to it. Over the years,  in the UK it developed to be the key supplier of soccer uniforms.”

Indeed, Umbro outfits more than 100 other professional teams in 90 different countries. It’s also instantly recognizable to millions of fans — so it's a valuable proposition.

Nike CEO, Mark Parker, called Umbro a brand with a powerful heritage and deep experience in the world’s most popular sport. He says the deal is all part of Nike’s growth strategy.

Mark Parker: “Since the early 90’s Nike’s football business has grown from about $40 million to approximately $1.5 billion. Aligning Umbro with Nike Football gives us even more competitive flexibility to segment and grow the market expanding the game and our share of football worldwide.”

Nike has told analysts that it’s aiming to have revenues of $23 billion a year by 2011. Umbro’s purchase — along with brands like Converse, Cole Hann and Hurley — is a step in that direction.

Nike stock jumped from $62 to $64 a share on the news.

Umbro’s board has unanimously recommended the deal to its shareholders. Nike says Umbro will be operated as an independent subsidiary, meaning it will keep its headquarters in the UK.

The deal is expected to be finalized next spring.

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