Nike Sells Umbro…What’s Next?

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Lululemon in action.

According to the official Umbro website, the company was started by Harold Humphreys in 1924. Humphreys noticed a rising interest in soccer among the British and decided to manufacture sports equipment for a profit. Nike bough Umbro in 2008 for a whopping $580 million dollars. Today, Umbro sells sports accessories and clothing in over 90 countries worldwide.

Nike stock fluctuated slightly since this announcement, but currently stands at $92.31 a share, down from 92.89 on October 24th. However, there has been speculation among share-holders about the company’s next move. Columnist Jim Cramer recently published an article on thestreet.com comparing Nike to Lululemon. In the article, he writes, “…If Lululemon is the Nike for Women, then that’s all that matters.” It is exactly because Lululemon appeals specifically (though not exclusively) to the female population that some experts have speculated that Nike has a good investment in buying out Lululemon and diversifying themselves. Now that the company has sold one affiliate, perhaps it is looking to acquire another.

For the full press release: http://nikeinc.com/press-release/news/nike-inc-announces-sale-of-umbro-to-iconix-brand-group

For Jim Cramer’s article: http://www.thestreet.com/story/11466605/1/cramer-if-lululemon-is-the-nike-for-women-then-thats-all-that-matters.html

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