--Nike agrees to sell Cole Haan for $570 million to
private-equity firm Apax Partners
--Company is moving forward with a narrower focus on the
namesake brand, as well as Jordan, Converse and Hurley
--Cole Haan generated $535 million in sales in the latest fiscal
year
By John Kell
Nike Inc. (NKE) agreed to sell its leather-shoes and bags brand
Cole Haan to private-equity firm Apax Partners for $570 million, a
deal that is part of a divestiture plan the company originally
announced in May.
Nike, which agreed to sell its Umbro soccer gear and apparel
line to Iconix Brand Group Inc. (ICON) last month for $225 million,
is moving forward with a narrower focus on the namesake brand, as
well as Jordan, Converse and Hurley.
The company got a better return on investment with the sale of
Cole Haan, a brand that generated $535 million in sales in the
latest fiscal year ended May 31. Nike bought Cole Haan in 1988 for
$80 million, plus the assumption of $15 million in debt. The sale
price of Umbro, meanwhile, came at a discount to its $565 million
acquisition price in 2008.
Nike on Friday said it expects the Cole Haan sale will be
completed early next year.
Umbro and Cole Haan make up a relatively small portion of Nike.
Combined, the brands generated $797 million in sales in the latest
fiscal year, a sliver of Nike's $24.13 billion sales total.
Nike is in the midst of a strong athletic-footwear cycle and new
products like the Nike+ FuelBand and Flyknit shoes have generated
buzz, though slowing demand in China and rising costs have hurt
results in recent quarters.
Analysts praised Nike's divestiture plan, saying it made sense
to focus on a narrower portfolio. Some observers argued it can be
hard to cultivate smaller brands in a company as large as Nike, as
the best designing and marketing talent would often be drawn to
high-profile brands like Jordan.
Prior to the asset sales announced this year, Nike last unloaded
an individual brand in April 2008, when it sold Bauer Hockey. That
was shortly after it sold off discount line Starter in late
2007.
Shares of Nike were up 1.2% to $91.96, as investors cheer
Thursday's news of a 17% dividend increase.
-Write to John Kell at john.kell@dowjones.com
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