As Sports Executive Weekly toured Europe retail last week, the story in the U.K. and on the continent quickly turned to the fate of Umbro and U.K. retail in general this holiday season as England failed to qualify for the 2008 European Football Championships.  The impact of the England loss apparently goes far beyond the sale of jerseys and memorabilia as U.K financial analysts calculated the loss of business on everything from key sponsors to beer companies and pubs.  The one bright spot was called out by one analysts that looked for a silver lining for the travel industry, which will now benefit from more U.K. families going on holiday next summer instead of spending it in front of the television or in the local pub.

England lost to Croatia 3-2 last Wednesday in a game that only required a draw for England to advance.  It will be the first time England will not qualify for a major tournament since the World Cup in 1994.  While Americans were sitting at home enjoying Thanksgiving dinner with family and friends, the Football Association, England’s governing body for soccer, quickly axed its controversial head coach, Steve McClaren.

The British Retail Consortium estimated the cost to British retailers to be approximately £600 million ($1.2 bn).  One news report in the U.K. estimated the wholesale loss to Umbro alone would be £150 million.  A SportsOneSource analyst suggested that there would be “very little to no” impact on Dick’s Sporting Goods, which recently inked an exclusive 15-year deal with Umbro for U.S. distribution, or Nike, Inc.

Umbro PLC, which has a deal with England for uniforms and other equipment through 2014, informed the London Stock Exchange on Thursday that “reduced levels of England home jersey sell-through at retail in 2007 and England's failure to qualify for the European Championships will have some effect on revenues in the current financial year…The effect on 2008 revenues, though still unclear, will be more pronounced due to a substantial reduction in our expected sales volumes for the new away jersey.”

Sports Direct International PLC, the U.K. sporting goods retailer which also owns nearly 30% of Umbro shares, also warned the market that it expected to share the pain of England's loss.  In a release issued Thursday, Sports Direct said that due to the failure of England to qualify for Euro 2008, the company can “no longer be confident of achieving that level of financial performance and believes at this stage that pre-exceptional EBITDA for the current financial year is likely to be below that achieved in the last year.”  JJB Sports, the U.K.’s other major sports retailer, has not issued any guidance yet.

The loss may have one winner and that is Nike, Inc., which recently announced a deal to acquire Umbro PLC for $582 million (£285 mm).  Details of the Nike offer were to be submitted to Umbro shareholders on Friday.

“With England's inspired loss last night, the best thing going for Umbro at this stage is the Nike bid,” said Numis analyst Ramona Tipnis in a note to clients.

Sports Direct, owned by billionaire Mike Ashley, had taken a larger stake in Umbro after announcement of the Nike deal, putting it in a position to block a deal that requires a 75% affirmative vote by shareholders.  Sports Direct shares were down nearly 25% for the week last week and have now lost over two-thirds of their value since the IPO in March.

Umbro shares were down 5.4%, still supported by the Nike deal on the table, while shares of U.K. retailer JJB sports were off 3.6% for the week.

>>> Ashley has been spotted everywhere of late from selling off stakes in Amer Sports to positioning himself as a spoiler in the Nike deal.  He is also rumored to be looking at U.S. retail…