Umbro warns of revenue hit
Sportswear firm Umbro warned today that England's failure to qualify for Euro 2008 will have a material impact on revenues for the current year as key customers fail to take delivery of orders.
The group said it is "highly unlikely "that by the year end key customers will have taken ownership of a "significant" number of England replica jerseys that are currently in its distribution facilities.
Umbro has contractual arrangements in place with its key customers and is now reviewing "all options available to it with regards to such contractual arrangements," it said.
The group, which saw rival Sports Direct take a 29.9% stake after US goliath Nike bid £285m for the UK firm in October, re-emphasised the poor outlook for the volume of sales of new England product to be launched next year.
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It also continues to work closely with Sports Direct to find a mutually acceptable way forward and has already agreed certain changes to commercial arrangements, involving increased support of the retail sell through of Umbro product.
"However, no final resolution has yet been achieved and these discussions are continuing," it said.
Umbro confirmed that the changes made to the commercial arrangements between Sports Direct and Umbro "are of a revenue nature, have been made in the ordinary course of business and are fair and reasonable so far as other Umbro shareholders are concerned."
