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Football kit manufacturer Umbro saw its shares fall by nearly 6 per cent on 20 January after it announced the early end of its sponsorship agreement with Chelsea. The agreement to sell replica shirts, due to run until 2011, will now end in June 2006. Umbro will receive a £24.5m compensation payment for the early termination which was said to be by mutual agreement. However, Umbro admitted that the move was 'disappointing'. With rivals Nike linked to Arsenal and Manchester United, the loss of the Chelsea contract meant that Umbro had no association with the top three Barclays Premiership clubs. In 2004 sales of Chelsea products were worth £8.2m to Umbro or 6 per cent of its UK turnover. Umbro said that losing the contract would hit 2005 sales and reduce expected pre-tax profit by £1m to £2m. The company is seeking to broaden its brand away from football kits to associated leisure wear.
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