Global athletic footwear retailer,
) has successfully sealed the previously agreed upon deal to sell
its Cole Haan affiliate brand in Apax Partners. The company will
receive $570 million for the sale of its Cole Haan brand to Apax
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Apax Partners views Cole Haan as an iconic brand with a broad
consumer appeal and projects immense growth opportunities for it.
Apax has joined forces with Jack Boys in order to facilitate the
growth of the Cole Haan brand in the U.S. and internationally.
In an effort to cut costs and sharpen focus on its NIKE, Jordan,
Converse and Hurley brands, Nike, in May 2012, revealed its
intention of divesting two of its brands - Cole Haan and Umbro.
The company's decision to sell these brands is guided by the fact
that the performances at Cole Haan and Umbro brands failed to
match up to that of its other brands. Additionally, Nike had been
facing numerous challenges such as rising labor and material
costs along with uncertainty in the European economies and
decelerating future orders in China due to poor performances by
On Oct 24, 2012, Nike signed an agreement with
Iconix Brand Group Inc.
) to sell its Umbro brand for $225 million. The deal was
completed by year-end 2012.
About Apax Partners
Apax Partners, a leading global private equity investment group,
has been in the business for more than 30 years, providing
long-term equity financing to build and strengthen world-class
companies. Funds under the advice of Apax Partners aggregate over
US$35 billion around the world. Funds advised by Apax Partners
are invested in companies across its global sectors of Tech &
Telecom, Retail & Consumer, Media, Healthcare and Financial
& Business Services.
We believe Nike's decision to divest two of its underperforming
brands will boost its bottom line. Meanwhile, in an attempt to
expand its global reach and market share, Nike is capitalizing on
growth opportunities in emerging markets, especially China. The
company is focusing on other tools, such as a direct-to-consumer
business model, to expand geographically. We believe Nike's
continued investment in China and focus on the direct-to-consumer
business will not only help expand market share, but will
facilitate the strengthening of its competitive position.
Nike currently has a Zacks Rank #2 (Buy). Other specialty retail
stocks that are performing well include
Francesca's Holdings Corporation
), which has a Zacks Rank #1 (Strong Buy), and
), which has a Zacks Rank #2 (Buy).