Nike may sell Cole Haan, Umbro to Apax Partners for $500 mn: report
06 Nov 2012
Nike Inc is close to finalising the sale of its Cole Haan handbag and Umbro shoe brands to private equity firm Apax Partners, a deal which may fetch the world's largest sportswear company around $500 million, Reuters yesterday reported, citing three people familiar with the matter.
Apax Partners has prevailed over other private equity firms including TPG Capital Management and Berkshire Partners in the auction, the report said.
New York-based Cole Haan, which specialises in casual dress, leather footwear and bags, was acquired by Nike in 1988, while Manchester, UK-based Umbro is a football specialist brand that was acquired by Nike in 2008.
In May, Nike had said it will begin the process of divesting of these two businesses immediately, and focus on driving growth in its name sake brand, Jordan, Converse and Hurley brands. (See: Nike plans to divest Cole Haan and Umbro brands)
"Divesting of Umbro and Cole Haan will allow us to focus our resources on the highest-potential opportunities for Nike to continue to drive sustainable, profitable growth for our shareholders,'' Mark Parker, president and CEO of Nike had then said.
Despite the global slowdown, Nike has seen strong demand for its shoes and clothes, but like most consumer product companies, the Beaverton, Oregon-based company faces rising costs on raw materials and packaging.
In April, its smaller rival, German sportswear company Adidas had said that it will reduce its product portfolio by one-quarter in order to cut costs and improve profitability.
London-based Apax Partners has teamed up with Jack Boys, the former CEO OF Converse to help run Cole Haan after the acquisition, the report added.