(By Balaseshan) Athletic footwear and apparel seller Nike Inc. (NYSE: NKE) said it has agreed to sell its Cole Haan affiliate brand to private equity firm Apax Partners for $570 million to cut costs.
On May 31, Nike announced its intention to divest of Umbro and Cole Haan to sharpen its focus on driving growth in the NIKE, Jordan, Converse and Hurley brands. Umbro brand was sold on October 24 for $225 million to Iconix Brand Group.
With regard to the use of Nike patent in Cole Haan's shoes, Nike spokeswoman Mary Remuzzi told the Bloomberg in an email statement that Nike technology will continue to be used by Cole Haan during a transition period. She declined to comment what would happen after that.
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"The decision to divest of Cole Haan allows us to sharpen our focus on opportunities with the highest potential for strong returns, and to make sure the brands within the Nike portfolio are the most complementary to the NIKE Brand," said Mark Parker, Chief Executive of Nike.
Apax had prevailed over other private equity firms including TPG Capital Management and Berkshire Partners in the auction for Cole Haan, according to Reuters citing people familiar with the discussions between Nike and Apax.
Nike said it expects the Cole Haan sale to be completed in the early 2013.
Apax Partners operates globally and has more than 30 years of investing experience. Funds under the advice of Apax Partners total over $35 billion around the world. These Funds provide long-term equity financing to build and strengthen world-class companies.
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Nike is engaged in the design, development and worldwide marketing and selling of footwear, apparel, equipment, accessories and services. The company focuses its product offerings in seven key categories: Running, Basketball, Football (Soccer), Men's Training, Women's Training, NIKE Sportswear (its sports-inspired products) and Action Sports.
NKE is trading up 1.59% at $92.27 on Friday. The stock has been trading between $85.10 and $114.81 for the past 52 weeks.