Nike is nearing a deal to sell its Cole Haan brand to Apax Partners for about $500 million as the athletic shoe-and-apparel giant looks to streamline its product offerings.
A deal could be announced as early as next week, according to two people briefed on the matter. But the people warned that negotiations were continuing and might still fall apart.
Six months ago, Nike announced plans to dispose of Cole Haan and the soccer brand Umbro in order to focus on its core Nike business. In October, Nike announced that it had reached a deal to sell Umbro to the Iconix Brand Group for $225 million.
The footwear industry has seen several large deals over the past year. Last month, Wolverwine Worldwide bought Collective Brands, which owns lines including Saucony, Sperry Top-Sider, and Stride Rite, for about $1.25 billion.
Nike's auction for Cole Haan - a fashion brand that sells chukka boots for men and trendy wedges for women - was hotly contested among seve ral private equity firms. Industry experts handicapping the sale considered TPG a natural buyer since Matthew Rubel, a former Cole Haan chief executive, now serves as a senior adviser to the private equity firm.
But Apax, which operates out of London and New York, prevailed over TPG, Sycamore Partners and several other firms, these people said. Apax has a long track record of operating retail and consumer businesses, including successful investments in Tommy Hilfiger and Phillips-Van Heusen.
Apax is expected to hire Jack Boys, a former chief executive at Converse, to run the company, according to the people familiar with the deal. Coincidentally, Mr. Boys was the C.E.O. of Converse when Nike paid $305 million in 2003 to acquire the sneaker company. Nike still owns the Converse brand, but Mr. Boys is no longer with the company.
A spokesman for Apax declined to comment. The news of the Cole Haan was earlier reported by Reuters.
Founded by Trafton Cole a nd Eddie Haan in Chicago in 1928, Cole Haan was originally a men's footwear company. The Beaverton, Oregon-based Nike purchased Cole Haan for $80 million in 1988 as the company looked to diversify into casual clothing and leather goods.
In addition to selling its shoes in department stores and other outlets, Cole Haan has over 80 of its own retail stores. Its corporate headquarters are in Scarborough, Maine, and New York.
Under Nike's ownership, Cole Haan moved away from its older, more conservative consumer base and updated its product line for a younger customer, including its G-series line. There have been other synergies: Nike put its air-cushion technology into Cole Haan soles, even in women's heels. And today, among Cole Haan's best-selling lines are its Maria Sharapova signature ballet flats. Ms. Sharapova, the tennis star and one of Nike's top athletes, helped designed the shoe.
Cole Haan has grown under Nike's ownership in recent years. It account ed for $535 million in sales in Nike's last fiscal year, a three percent increase over the previous twelve months.
The Umbro investment has been less successful for Nike. It paid about $565 million for the Britain-based Umbro in 2008 with plans to compete with Adidas and other big soccer brands. After having little success in reviving the brand, it jettisoned Umbro and decided to focus on its flagship Nike soccer line.
Nike's ancillary brands account for a small percentage of the company's overall sales. According Nike's last annual report, “other brands†- a group that includes Umbro, Cole Haan, and Converse - only account for about 13 percent of the company's $24 billion in revenues.
