Nike 225 Million Has Sold UMBRO Brand For 4 Years And Has Dried Up Its Core Value.

A sale agreement that surprised many football fans was announced. It sold its brand UMBRO to ACON's brand group at a price of 225 million dollars, and said the deal is expected to end by the end of 2012.

Mark Parker, President and chief executive officer of Nike, said the initiative would allow it to "focus on the most potential growth opportunities".

UMBRO, formerly an old British football equipment manufacturer, was bought by Nike at a price of 285 million pounds in 2008, aimed at making up for football.

The gap, however, was sold only after 4 years of holding.

"For Nike, this is not a failed business. The acquisition of UMBRO gives Nike a lot of sponsorship and promotion opportunities in the field of football."

Analysts say that in the 4 years of holding brand, the latter has almost dried up the commercial value of the former.

Reporters interviewed learned that UMBRO's new owner, acennis, is a Chinese company whose usual business model is to acquire foreign brands, and then look for local cooperative operators in emerging markets such as China.

The operation of UMBRO brand is no exception. Its market participants in China will be the sports brand distributors such as BELLE.

Nike's "cage changing bird"

The two core values of UMBRO's R & D technology and sponsorship resources have been dried up by Nike.

The news of sale has aroused concern because it has many fans all over the world.

UMBRO was first a British football equipment manufacturer, founded in 1924 by the British Humphrey brothers.

In the course of its growth, it has won the world cup honor with many green heroes.

It also has a large number of fans in China because of its long-term sponsorship of England national football team and many football stars.

In 2008, the gradual decline of UMBRO was acquired by Nike at a time of 285 million pounds.

"Nike's decision to buy UMBRO and the sale of the brand in 4 years are all considered from the point of view of value complementarity."

A Hongkong financial analyst, who has long been concerned about Nike, told our correspondent that Nike and Adidas, the two giants of the sports brand, demand more attention from the former's products, while the latter have strong resources in the football field for a long time.

Nike's initial acquisition of UMBRO aims to complement its gap with Adidas in terms of football.

But in the past 4 years, Nike has gradually infiltrated its sponsorship and promotion into the field of football. After experiencing the test of the top two competitions of the European Cup and the world cup, it found that its main brand NIKE has already had a strong stand against Adidas in the field of football.

"At this time, the value of UMBRO brand is not big enough for Nike."

The analyst said.

In fact, Nike has already made preparations for stripping UMBRO brand.

The sponsorship contract between UMBRO and England was originally due to end in 2018, but the Football Association announced in August this year that it will terminate cooperation with UMBRO, replacing Nike.

In addition, Nike also obtained a sponsorship contract from UMBRO, such as Manchester City and other heavyweight football teams.

"The value of UMBRO has actually been dried up."

Sports brand dealer and market watchdog Ma Gang also believes that for the sports brand, product R & D technology and sponsorship resources are the two most important values. In the 4 years Nike took over UMBRO, all of the above quality resources have been collected, leaving only the UMBRO brand that is still in constant devaluation.

Low price strategy blocked

Nike's channel expansion mainly relies on BELLE and Baosheng two professional channels, but the latter is in a profit predicament and is shrinking the front line.

The puzzling point of Nike's sale of UMBRO is that Nike had publicly expressed its desire to enter the three or four tier market in China in 2010 and considered the introduction of lower priced products.

At that time, the analysis showed that if Nike was ready to play the low price brand, its UMBRO had brand influence and market base, and it was an excellent choice for Nike to enter the three or four line market of China, and it could act as a "pioneer".

The Hongkong financial analysts said that the decision to sell was actually well understood.

In the past two years, Nike has indeed tried to go deep into China's three or four line cities, but at present it seems that the attempt is a failure.

Nike's channel expansion mainly relies on BELLE and Baosheng two professional channels, but the latter is in a profit predicament and is shrinking the front line.

And BELLE's main channel is concentrated on the second tier cities, which do not have the ability to sink to the three or four tier cities in the short term.

"That is to say, the main problem facing Nike is not choosing which brand to do low price, but trying to find that it has no channel to sink."

The analyst said.

In addition, many market participants believe that Nike has some differences in its multi brand operation strategy compared with its old rival Adidas.

Adidas's multi brand strategy is more resolute. Its flag, whether it is clover, Reebok or Y-3, has relatively independent promotion plan.

While Nike is different, it has a clear preference for its brand investment. It is hard to imagine that its brands such as CONVERSE can surpass Nike's main brand.

In fact, even many fans found that UMBRO was Nike's brand after UMBRO was sold again by Nike.

UMBRO's "Hydrangea" throws into the Chinese market

Ai Connie J, a Chinese company, has acquired a large number of clothing brands in the United States in recent years, and some of them sell them after the premium is realized.

"It's just a pity that UMBRO is the brand."

Ma Gang said that due to the large number of fans in England, its long term sponsor of UMBRO has also been well known to domestic fans.

Before being acquired, it is a second-line sports brand after Nike and Adidas, and also has a place in the domestic market.

But after Nike took over, it obviously did not spend much thought on running the brand, not only slow the renewal of products, but also lacked good channels.

However, according to a reporter's interview, UMBRO brand will probably gain vitality in the Chinese market after being resale by Nike.

The former Hongkong financial analyst told reporters that Ai Connie J, UMBRO's Iconix Brand Group, is not a NASDAQ listed company, but its business is mainly oriented to China's Hongkong and mainland markets. It has long-term experience in the brand operation and channels of clothing products.

Zhang Bingliang, general manager of Shanghai lion Consulting Co. Ltd., who is familiar with the business mode of the business, told reporters that acennis should be regarded as a Chinese company. In recent years, it has acquired a large number of clothing brands in the United States. Some of them sell their brands after the premium is realized, and the other part is looking for partners in the country, which enjoys partial shares, and the production, channel and brand operation of the brand are all handed over to the partners.

The Chinese executives at acone confirmed the statement to reporters and said that UMBRO's partners in the Chinese market are still looking for the process.

Before, Ai Connie J had similar cooperation with Mcglaughlin and Shanghai, such as Swiss apparel and so on. Generally speaking, acennis only accounts for about 20% of the joint venture company.

For UMBRO's future partners in the Chinese market information, the top executives did not disclose.

Zhang Bingliang believes that the intention of the acquisition is the layout of the Chinese market.

UMBRO will have the greatest possibility of "sports BELLE" and other sports brand dealers in the future.

At present, under the competition of sports brand, the channel providers will not be satisfied with the retail business for a long time. Instead, they should consider the upstream pformation, and the brand name of UMBRO.