Nike purchases Umbro
Nike’s march to become the #1 brand in world football has taken a significant leap with the announcement that it has aquired Cheshire based football stalwart Umbro PLC for $582 million USD. Umbro listed publicly in 2004, and is reeling after a recent profit downgrade and speculation that profits could slide by as much as 40% should the English national team fail to qualify for Euro 2008. The Nike deal has been warmly embraced by Umbro, the English FA and Umbro affiliated clubs.
Currently there is no indication that any teams or players from the Umbro stable will be rebranded with the Nike swoosh. At least certainly not in the short term. Nike’s vice-president for Europe, Middle East and Africa, Eunan McLaughlin, has stated that "We want to invest in and grow the Umbro brand. We are in this for the long haul."
Over the past decade Nike has managed to brand a greater share world football’s marquee clubs and players, including Rhonaldinhio and the once Umbro-sponsored Manchester United. They have also become the chief trendsetters when it comes to football apparell design, with their multi-panelled kits almost becoming a standard starting point for other competing kit manufacturers. Culturally they have brought football into the sneaker and street culture fold like no other brand has previously, thanks to such projects as F.C.R.B.
What does this mean for adidas? Football is at the heart of adidas’ sports heritage. Much of the brand’s prestige comes from it’s historical domination of world football. Currently it seems likely that adidas will even loose it’s sponsorship of the German national side, with adidas locked in dispute with the German FA which is seeking to drop adidas by 2011 so it can accept an offer from Nike that is six times the amount currently paid by adidas.
Gucci’s parent company PPR has already this year aquired a controlling stake in Puma. Reebok and Converse are now subsiduaries of adidas and Nike respectively. In an increasingly predatory footwear and sports apparel market, could adidas itself be vulnerable to a future takeover bid?