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News and Commentary On Newcastle United Football Club By Ed Harrison, A Proud Exiled Geordie And Lifelong Fan

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Mike Ashley’s Business Favorites To Buy Umbro

8:45 am, Monday, June 4th, 2012 by Dr. Ed Harrison · 19 Comments

Mike Ashley business in the world of football – namely Newcastle United – is finally starting to do well.

Mike Ashley – at a Newcastle game

Mike’s has owned the famous Tyneside club for five years now, and the first two years were a compete and utter disaster, with Newcastle ending up being relegated, and Ashley has admitted he made many mistakes in that time.

He’s right about that, but over the last three years Newcastle have made an amazing come-back, and finished 5th top of the Premier League last season, and Ashley is now a little more popular with Newcastle fans.

It looks like his Sports Direct business is also doing very well, with increased revenues and profits,  and news today that the company is in the lead to buy Umbro, the football kit-maker put up for sale by American company Nike last week.

Umbro designs, sources, and markets sport-related apparel, footwear, and equipment, and its products are now  sold in over 90 countries around the world.

Nike bought Umbro for £285M in 2008, and others, particularly some private equity firms are also interested in buying Umbro, which is best known for its long-running association with the England football  team.

Apart from the time between 1974 and 1984, in which Admiral supplied the kits, Umbro has supplied the England teams at all levels since 1954 – I remember it very well. :D

Umbro was founded in 1924, in Wilmslow, Cheshire as Humphreys Brothers Clothing, and Harold Humphreys set up Umbro with his brother Wallace, with the aim of bringing the ideals and practices of the clothing industry to the rapidly growing world of sportswear, and they settled the business to Cheadle, near Manchester,

Umbro now provide the kits for Premier League Champions Manchester City, and they had revenues of $224M (£146M) in 2011, but  there was no growth over the previous year.

Nike wants to unload the company and concentrate on the brands it has, which are growing more rapidly.

Sports Direct used to have a 30% share of Umbro before it was taken over four years ago, and Mike Ashley’s company has had strong sales growth for both February and March of this year.

Workers at the company, and of course Mike Ashley himself, are in line for big bonuses if the company meets its stretch earnings targets.  Revenues for the 9 weeks to 25th March were £267.6M, and that was an increase of 13.2% year over year.

Sports Direct will give their 2,000 staff shares worth about £50K each,  after hitting sales targets in both previous financial years – 2010 and 2011.

The company owns top brands Lonsdale and Slazenger, and has recently set a new stretch target for Ashley himself, who is the Executive Deputy Chairman and receives no real wages,  but is paid in shares he receives, based on the overall performance of the company.

Ashley is in line to get up to 8M shares,  if the company’s earnings rise by 70% to £340M in 2015, and Sports Direct is due to announce its full-year results next month.

The Newcastle United non-playing staff will look at these figures,  and hope they will be put on the same kind of incentive based deals, when Newcastle do well – and it seems now would be a good time to offer the incentives, based on various criteria.

Manager Alan Pardew is already paid heavily on incentives, based on how the Newcastle team performs, and we have to hope that Alan was handsomely paid for last season  – he deserves every penny for transforming Newcastle in such a short time-frame.

Mike Ashley may already have the rest of the non-playing staff on some incentives, and of course the actual playing staff don’t need any more money – they get enough as it is.

Comments welcome.



Tags: Financials · Newcastle News · Other News



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19 responses so far ↓

  • 1 Beattie25 // Jun 4, 2012 at 8:52 AM

    Umbro kits in tue future lads.

    You know what this means. Ashley can do to us what the sheiks do for Citeh and sponsor us a limitless amount for the usage of umbro as our sponsor. This way we can beat the did fair play rulings and buy as many players as we want with the £1 million over 5 year deal in sure we’ll get from him.

  • 2 spitfire_ // Jun 4, 2012 at 8:52 AM

    Reading between the lines… we will wearing Umbro after couple of years without receive any money from them. Just kidding… I pray for Nike.

  • 3 Graeme // Jun 4, 2012 at 8:58 AM

    Beattie25 – in your dreams mate lol. Sheik Ashley is a much more frugal model than other Sheiks

  • 4 Solaidback // Jun 4, 2012 at 9:09 AM

    I can see how £1m over 5yrs is gonna buy us many players thats only 200k a year muppet.. lol

    Now if you meant £1 Billion, then yer defo in deluded land or was that dream land.. lol

    Sonehow I also doubt Ashley would scupper the Puma deal for a free one, as after all, don’t some people still think he’s only in it for the rpofit & what profit would he get from dropping Puma to replace witrh Umbro unless it was only in Sports Directs pocket, as the article says, he’s not paid any wages by SD… so the only money he gets would be from sponsorships for the club which he owns alone.. :)

  • 5 Beattie25 // Jun 4, 2012 at 9:11 AM

    Solaidback

    I see my comedy was lost on you

  • 6 PontiusLee // Jun 4, 2012 at 9:14 AM

    i would be really happy if we got umbro to be our kit makers.
    they make great kits.

  • 7 studsy // Jun 4, 2012 at 9:15 AM

    Lol Beattie. Some people just aren’t born with sarcasm receptors in the brain!

  • 8 studsy // Jun 4, 2012 at 9:17 AM

    Colo interview in Journal: http://www.journallive.co.uk/nufc/newcastle-united-news/2012/06/04/61634-31107112/

  • 9 Klatoon // Jun 4, 2012 at 9:17 AM

    Sheik Ashley…i like it :-)

  • 10 clinath@ed // Jun 4, 2012 at 9:18 AM

    Beattie….Not on the rest of us insane!

  • 11 graham cwarr // Jun 4, 2012 at 9:19 AM

    There are some donkeys on here aren’t there. Even written down that was obvious sarcasm

  • 12 studsy // Jun 4, 2012 at 9:21 AM

    What great words about togetherness from a man who is joining man city!

    *WARNING! This article may contain sarcastic phrases

  • 13 Dannyo // Jun 4, 2012 at 9:21 AM

    If u read the entire article in the telegraph Beattie, it says that MA is in for it, but unlikely to get it.

  • 14 Beattie25 // Jun 4, 2012 at 9:23 AM

    Thanks for backing me up guys. It’s great to know that people will come to your aid in the event of comedy crisis.

    I kid you not, if this was facebook, you could be my friends.

    xxxxx

  • 15 studsy // Jun 4, 2012 at 9:23 AM

    If you have been affected by being unable to determine humour, then please write to the
    NUFC Blog Action Center:

    123 Helpme Street
    Optimism Valley
    OV1 1AC

  • 16 Dannyo // Jun 4, 2012 at 9:28 AM

    I enjoy this line from Collo in the Journo:

    “We can’t expect to challenge for the Champions League just because we are Newcastle, we must earn it through hard work and maintain the same levels we had last season.”

    So many fans think exactly what he says at the start there, for me, THAT is the straw that broke the camels back.
    Relegation happened, and it had to for fans to get back down to earth.

  • 17 studsy // Jun 4, 2012 at 9:28 AM

    Ahh here we go beattie: http://images.cheezburger.com/completestore/2009/7/24/128929210324591702.jpg

  • 18 graham cwarr // Jun 4, 2012 at 9:32 AM

    Ha ha studsy how do you know my address?

  • 19 ShanghaiMag // Jun 4, 2012 at 10:24 AM

    Would Ashley be allowed to buy Umbro? He already controls a large market share of the sports retail market?
    What would the monopolies and mergers commission say about that?




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