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.

Image: Nike