British sportswear maker Umbro reported a steep decline in first-half profit and warned that it would miss forecasts for 2008.

The U.K. sportswear firm, which specializes in soccer-related products
and sponsors six clubs in England's top soccer league, said pretax
profit for the six months to July 1 dropped 44.5% to 9.8 million pounds
(U.S. $19.7 million)

Sales declined 49% to 55.7 million pounds (U.S. $112.7. million). The
company said excess inventories in the category of England home jerseys
and disappointing sales in licensed apparel led to the downturn. Umbro
stressed that the first-half results were not directly comparable with
last year's, because volume then was boosted by the soccer World Cup.

Wholesale sales, which include sales by the group's licensees, fell 30%
to 175 million pounds (U.S. $352.5 million). Double digit growth came
in Eastern Europe, USA, Latin American and China.

Commenting on the results, Chief Executive Steve Makin said they were
as expected, with continued strong growth in Eastern Europe, the U.S.,
Latin America and China.

Specifically in the U.S., total sales – including licensed – rose 155%
over H1 2006. The soccer speciality business having increased by over
50% and the distribution agreement with Dick's Sporting Goods Inc.
“progressing well.”

Overall, however, Umbro said that summer trading in licensed apparel,
and England soccer jerseys in particular, was “disappointing” and
cautioned that sales of the jerseys would likely come in below targeted
levels in 2008 and hurt earnings.

Makin said in a statement, “The first half of 2007 has been in line
with our expectations. We have seen continued strong growth from our
business in Eastern Europe, USA, Latin American and China. As
anticipated, UK and Western European comparatives have been
affected by last year's World Cup. Looking forward, management believe
branded sales growth and performance of international markets will be
in line with expectations.

“Sell-through of England replica jerseys during the critical summer
trading period has been disappointing. However, the current order book
and contractual agreements lead management to believe full year
licensed apparel sales will be in line with expectations. Looking
further ahead, we believe replica jersey sales during 2008 will be
below targeted levels and this will impact earnings in 2008.”

Separately, Umbro appointed Gary Brown as its new CFO. Brown, who has
more than 10 years experience in retail and spent the last four years
as finance director of Instore Plc, will take over his new post in
November. In June, Umbro CEO Peter McGuigan announced his intention to
step down and was replaced by CFO Steve Makin.

“I am delighted that Gary will be joining us as Chief Financial
Officer,” said Makin. “He has an impressive and extensive track record
in the retail sector; a diverse background in the finance and
commercial functions; and a strong reputation. We have a strong team in
place going forward and as the business grows I expect to build on this
where required.”

Under its new plan, Umbro wants to become at least the number three
soccer brand in each market where it operates, to expand its branded
business by at least 10% a year and to generate 80% of wholesale sales
from international markets. Umbro said the performance of the licensed
business this year reinforces the requirement to accelerate the growth
of the branded business.