After five months of shopping its Umbro brand around, Nike Inc. has found a buyer.
Nike (NYSE: NKE) on Wednesday announced it has reached a definitive agreement to sell Umbro to Iconix Brand Group Inc. (NASDAQ: ICON) for $225 million. The Washington County athletic footwear and apparel company paid $565 million for the U.K.-based brand in late 2007.
New York-based Iconix owns, licenses and markets a portfolio of nearly 30 consumer brands including Candie's, Bongo, Badgley Mischka, Joe Box, Starter and Sharper Image.
The transaction is expected to close by the end of 2012.
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Nike announced its intent to divest Umbro and casual footwear brand Cole Haan on May 31 to sharpen its focus on its Nike, Jordan, Converse and Hurley brands.
“It is a difficult decision to divest any business but this action will enable us to focus on our highest-potential growth opportunities,” said Nike CEO Mark Parker in a statement. “Umbro has a great heritage, but ultimately, as our category strategy has evolved, we believe Nike Football can serve the needs of footballers both on and off the pitch.”
Umbro's performance hasn't matched that of other Nike brands. Umbro and Cole Haan combined for pretax losses of $43 million in fiscal 2012, up from $18 million a year earlier.
In recent months, Nike has been untethering itself from Umbro while still maintaining a high-profile in soccer. In early May, just prior to announcing its intent to sell Umbro, Nike inked a deal to replace Umbro with its Nike brand as sponsors of the Manchester City Football Club. Then in August, there were reports that Nike would replace Umbro as the official uniform supplier of the English Football Association.
Nike is presumably still hunting a buyer for Cole Haan. A Reuters report in August indicated that private equity firms may be among the bidders.
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