Sportwear brand Umbro expects to take a sales hit after Chelsea FC decided to end its deal with the brand five years early. The sponsorship agreement with Chelsea for the supply of kit and the sale of replica products will end in June 2006 instead of the contract end date of 2011. Chelsea, currently riding high ten points clear at the top of the Premiership, will pay Umbro £24.5m to end the deal
In 2004, sales of Chelsea product of £8.2m represented 6.1 per cent of Umbro’s UK turnover and 2.3 per cent of total wholesale equivalent sales. Umbro said it expects the announcement of early termination will have an adverse effect on sales in 2005 and expects a reduction in pre-tax profits before tax for the year to December 2005 of £1m to £2m