Nike to sell off Maine-based Cole Haan shoes

Posted May 31, 2012, at 12:52 p.m.
Last modified May 31, 2012, at 2:36 p.m.

NEW YORK — Nike is kicking its leather shoe and soccer brands to the curb.

The world’s largest maker of athletic shoes and clothes said Thursday that it plans to sell two of its brands — Umbro soccer gear and Cole Haan shoes and accessories — to cut costs and focus on its namesake brand.

Cole Haan traces its roots to Chicago in 1928, when it was making flapper-friendly leather shoes. Its current incarnation as a purveyor of men’s and women’s leather shoes and bags based in Scarborough, Maine, began in 1975. Nike acquired the brand in 1988 in a deal worth about $95 million at the time. Though the company did once make shoes in Maine, it closed its last manufacturing operations in the state in the late 1990s.

The company says more potential lies in its Nike products along with its Jordan, Converse and Hurley brands, which it says have “unique consumer relationships” that complement the Nike brand.

“Divesting of Umbro and Cole Haan will allow us to focus our resources on the highest-potential opportunities for Nike, Inc., to continue to drive sustainable, profitable growth for our shareholders,” said CEO Mark Parker.

Strong demand for Nike’s shoes and clothes has helped the company charge past many rivals. But, like most consumer product makers, Nike Inc. faces rising costs for packaging, fuel and other raw materials.

It recently launched two high-profile lines: FlyKnit lightweight shoes and Nike+ training software and gear.

Nike spokesman Charlie Brooks said Nike doesn’t have any buyers lined up but hopes to complete the sales by the end of May 2013, when the company’s fiscal 2013 concludes.

Umbro was founded in 1924 in Manchester in the United Kingdom as one of the first makers of soccer gear. Today, it also makes soccer clothing and shoes, and it outfits many European and North and South American soccer teams. Nike acquired Umbro in 2008 for $582 million.

Both brands have recently weighed on Nike’s profit margin — the amount of each dollar in revenue that a company actually keeps. In its most recent quarterly conference call, the company said revenue increased at Umbro, Hurley and Cole Haan, but their profitability fell.

Nike shares fell 81 cents to $107.44 in early trading.

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