Nike acquires Umbro

Nike has reached an agreement to acquire Umbro, the leading UK based global football brand. Umbro has over 70 years experience with the world’s leading sport and biggest football market. The Board of Directors of Umbro plc, which is listed on the London Stock Exchange, has unanimously recommended that shareholders accept the offer of 193.06 pence, which together with the declared dividend values the company at approximately $582 million (£285 million), or approximately $4.00 (195 pence) per share.

The acquisition will significantly expand Nike’s global leadership in football, a key growth category for the company. Since the early 1990s, Nike has grown its football revenues from about $40 million to approximately $1.5 billion and established brand leadership in the sport. Umbro sells products directly or through licensees in more than 90 countries and has sports marketing relationships with many top football players, teams and leagues, including the England national team. Umbro’s 2006 annual revenues were approximately $276 million (£149.5 million). Umbro reports that if licensed sales were translated to direct sales based on wholesale cost, total wholesale equivalent sales were approximately $755 million (£409.4 million).

Nike intends to operate Umbro as a stand-alone affiliate brand, with a focus on accelerating the brand’s existing growth strategy. Similar to other brands in Nike’s portfolio, Umbro will benefit from Nike’s product research, design and development expertise, and supply chain and distribution resources.

Umbro will join a strong and growing Nike portfolio of affiliate brands, including Converse, which was acquired by Nike in 2003, Cole Haan and Hurley International. Converse exemplifies Nike’s track record of acquiring and growing complementary brands. Since acquiring Converse in 2003, revenue has grown at a compound rate of 22 percent, and in fiscal 2007 Converse revenues grew over 20 percent to surpass $550 million. The brand has benefited from Nike product design and brand management expertise. Nike’s portfolio of other businesses is contributing more than $2 billion in revenue today, and is targeted to contribute 25 percent of the company’s revenue growth by fiscal 2011.

Retail sales see three year high

UK retail sales rose by the strongest annual rate in three years in September, official figures show. The Office for National Statistics (ONS) said sales were up 6.3% from the same month a year earlier, the biggest gain since September 2004. Sales increased 0.6% from August, above analysts' expectations of a 0.1% rise. Heavy discounting by retailers spurred the increase in spending, the ONS said. Recent credit jitters fears and fears of a wider economic crisis have prompted analysts to predict that the UK would leave rates on hold at 5.75% or even reduce them, rather than continue raising them.

But these figures, along with upbeat labour market data on Wednesday, suggest that the consumer has not yet been deterred by the market turmoil.

The Bank of England's monetary policy committee (MPC) has increased UK interest rates five times since August 2006, with the last rise coming in July this year.

"September's strong rise in UK retail sales, albeit accompanied by heavy price discounting, increases the chances that the MPC will hold off a while longer before cutting interest rates," said Vicky Redwood at Capital Economics.

"These data confirm other evidence that the economy grew more strongly in Q3 than the MPC expected. Along with the MPC's lingering concerns, this points to rates staying on hold until next year."

British Fashion Awards 2007

The nominees of the British Fashion Awards have been announced and on 27th November, the awards sponsored by Swarovski are taking place at the Lawrence Hall, Horticultural Halls in London. The British Fashion Council (BFC) selected nominees in ten different categories. UK Vogue’s editor Alexandra Schulman chairs the BFC’s selection committee and the winners will be judged by leading persona’s from the fashion industry like buyers and journalists. With an exclusive champagne reception and dinner for 400 people from the fashion industry the award ceremony will be celebrated.

This year the Fashion Awards will introduce a new Award for Outstanding Achievement in Fashion Design. For this award the winner will be judged on his or hers international performance on the fashion industry. The Award for Fashion Creator will be dedicated to one of the most colourful figures in fashion, the late Isabella Blow.

The nominees for New Designer are Christopher Kane, Gareth Pugh and Marios Schwab. The Shop at Bluebird, Dover Street market and Marc Jacobs are runners up for the Best New Retail Concept. Nominated for the Designer of the Year Award are Luella Bartley, Stella McCartney and Anya Hindmarch. Either Mert and Marcus, Michael Howells and Terry Jones will be rewarded with the Fashion Creator Award. Other categories include Model of the Year, Menswear Designer of the Year, and Accessory designer of the Year. The winners of the BFC Award for Outstanding Achievement in Fashion and the BFC Fashion Enterprise Award will be announced at the actual awards ceremony.

Image: Marios Schwab/Chris Moore