Soccer kit firm Umbro is to lose a sponsorship deal with English Premier League leaders Chelsea five years earlier than planned.
Umbro shares were down 6.4 per cent at 102-1/2 pence today after it said the termination of the Chelsea deal in June 2006 would have an adverse effect on 2005 sales and cut pre tax profit by up to £2 million ($3.8 million).
It did not say why the contract to supply playing and training kit and the sale and distribution of replica products, due to run until 2011, was being terminated early.
Sales of Chelsea-branded Umbro products totalled £8.2 million in 2004, representing 6.1 per cent of its UK turnover and 2.3 per cent of group total wholesale equivalent sales.
However, Umbro, which listed on the London market last May, said that Chelsea, to make up for terminating the contract, would pay it £24.5 million in June 2006, which could enhance earnings in the medium term.