Nike Taps Goldman for Cole Haan, Umbro Sale


Nike has hired Goldman Sachs to lead a sale of its Cole Haan and Umbro brands, according to sources familiar with the situation.

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Nike announced on Thursday plans to divest the two brands and refocus its portfolio, a strategy it said would be completed by May 2013, when its fiscal year ends.

Sources said the auction of the two brands, which has yet to kick off, would likely cater to private-equity firms, known to circle the retail sector for bargains.

Two such deals have occurred in the past month: Sycamore Partners Talbots, and a acquired Collective Brands .

Private-equity firms are often called on for turnaround expertise, a function that could serve the brands well.

Nike’s acquisitions of the two brands occurred 20 years apart but have had a similar financial performance, and, sources say, they could be acquired together. In the last fiscal year, Cole Haan revenues were $518 million, but the unit struggled to make a profit. In its most recent quarterly report, Nike said Cole Haan revenues were “flat for the third quarter and year-to-date.” Nike's fiscal third quarter ended Feb. 29.

One source said a price tag for Cole Haan could be in the range of half a billion dollars, if acquired separately.

Nike wrote down some $400 million in goodwill charges the year after it took Umbro private and revenues had been declining. However, in the fiscal third quarter, Nike said the Umbro brand saw “mid-single-digit percentage growth” in revenues.