Two of the UK's leading sportswear firms were left reeling this morning (22 November) as they woke up to the realisation that England would not be taking part in football's Euro 2008 tournament.

Kit maker Umbro, together with 30% stakeholder and major retailer Sports Direct, issued statements on the London Stock Exchange in reaction to last night's defeat by Croatia, knocking England out in the qualification stage. It follows a string of bad results for the national team over the past few years of qualifying.

Umbro had already warned in September that summer sales of England replica shirts had been disappointing, adding today that consumer demand for the jerseys has weakened further since the announcement.

"The 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," Umbro said.

"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."

Umbro, currently the subject of a GBP285m (US$582m) cash takeover offer from Nike, did maintain however that branded sales growth and performance of international markets in 2007 would be in line with expectations.

The company added: "This situation serves to underline our strategy to pursue growth in branded products and international markets.

"This strategy, which is clearly paying dividends, would be strengthened as part of Nike's affiliate programme if the offer from Nike were to be successful. We look forward to despatching the scheme document, which will outline further details of the offer, to Umbro shareholders tomorrow, Friday 23 November."

Mike Ashley's Sports Direct retail chain, meanwhile, has indicated that earnings indications made during its AGM on 10 September for growth during the full-year ending 27 April 2008 were now in doubt.

"As England have not qualified for the 2008 European Football Championships, 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," a Sports Direct statement said.

By Joe Ayling