Nike Inc., the world’s largest athletic-shoe maker, agreed to sell its Cole Haan fashion brand to private-equity firm Apax Partners for $570 million as it focuses on faster-growing businesses.
The transaction is expected to be completed in early 2013, Beaverton, Ore.-based Nike said Friday. Nike said in May that it was seeking to sell Cole Haan and soccer brand Umbro.
Nike Chief Executive Officer Mark Parker is focusing on the business units with the most growth potential and profitability.
Iconix Brand Group Inc. agreed to buy Umbro in October for $225 million in cash.
“It frees Nike up to concentrate on the healthiest piece of the business,” Matt Powell, an analyst for SportsOneSource in Scarborough, Maine. “Putting all of management’s attention to driving athletic footwear worldwide is a good strategy.”
The company bought Cole Haan in 1988 for $95 million, including debt. After a year of ownership, the division had sales of $87 million.
In the fiscal year ended May 31, Cole Haan increased revenue 2.7 percent to $535 million. That made up 2.2 percent of Nike’s $24.1 billion in total sales. The unit had 178 stores, including 109 in the United States.
That means the sale price was about one times that of Cole Haan’s annual revenue, which is decent considering it sold Umbro for less than what it paid in 2008, according to Paul Swinand, a retail analyst for Morningstar Inc. in Chicago.
Apax, based in London, partnered with Jack Boys, who left the CEO role at Nike’s Converse unit in 2009.
Apax has experience in retail and fashion, buying Tommy Hilfiger in 2006 for about $1.6 billion and then selling it to Phillips-Van Heusen Corp. for about $3 billion in 2010.
Meanwhile, Nike said Thursday that it is boosting its dividend payment and planning a two-for-one stock split.