london (Bloomberg) — Umbro Plc, the soccer-uniform maker being acquired by Nike Inc., and UK retailer Sports Direct International Plc said earnings will be hurt by England's failure to qualify for the 2008 European championship.

Sports Direct shares fell as much as 17 percent, while Umbro and JJB Sports Plc stock also dropped yesterday after the England team was eliminated from the tournament in a 3-2 loss to Croatia on Wednesday night. Sports Direct, the largest UK sporting-goods retailer, said profit for the year through April will be below last year.

England's exit will cost the UK economy about £2 billion ($4.1 billion), according to Simon Chadwick, a professor at Coventry Business School. Umbro, which has supplied the team's uniforms since 1984, relies on international tournaments such as last year's World Cup to fuel demand for replica jerseys. Sports Direct sells 65 percent of the England shirts bought in the UK.

"The absence of a home side in next year's tournament will be a major disappointment for the sports retailers, who were hoping for a boost to sales during what is likely to be a tough year in terms of consumption," said Matthew McEachran, an analyst at Kaupthing Singer & Friedlander, in a note to clients.

Sports Direct shares fell as much as 21.5 pence to 91 pence in London and traded at 96 pence as of 12.47 p.m. local time, heading for the lowest close since they were sold for 300 pence apiece in a February initial public offering.

Umbro stock fell as much as 7.5 pence, or 4.3 percent, to 167 pence in London, trading 13 percent below the value of an agreed offer from Nike. Shares of JJB Sports, Sports Direct's biggest competitor, declined as much as 9.1 percent.

Umbro, which makes more than a quarter of sales in Britain, said it expects a "substantial" drop in sales of England's new away shirt that goes on sale in 2008. The national team's next opportunity to play in a major international soccer tournament will be the 2010 World Cup in South Africa. England last failed to reach the finals of the European championship in 1984.

"Conditions continue to be very challenging in relation to retail sales of licensed apparel as consumer demand for England replica jerseys has weakened," Umbro said in a statement.

Umbro's sales of reproduction jerseys made under licence from national teams and clubs plunged 58 percent in this year's first half after climbing by a third in 2006, when the World Cup fuelled demand. Sales of England gear rose 26 percent last year.

Nike, the world's largest athletic-shoe maker, agreed on October 23 to pay 193.06 pence per Umbro share in an effort to dethrone Adidas AG as the world's top maker of soccer apparel by the 2010 World Cup. The bid, which is worth £285 million, depends on the support of Sports Direct after the retailer last month doubled its stake in Umbro to 29.9 percent.

Mansfield, England-based Sports Direct said today it can no longer be confident of achieving the "limited growth" in earnings it had forecast for the fiscal year ending April 2008.

"We suspect that the real issue is poor trading in the core business and always assumed that profits would be down anyway," said Nick Bubb, an analyst at Pali International Ltd. in London.

Sports Direct has twice previously said profit may falter. In April, analysts cut their earnings estimates after the company reported that sales growth had weakened. The retailer's stock slid 23 percent on July 24, the most ever, after it said profit growth would be "limited".

Steve McClaren was fired yesterday as England soccer coach after 17 months in charge. The team, which ranks 11th in the world according to governing body Fifa, fell two goals behind against Croatia after 14 minutes before levelling through goals from Frank Lampard and Peter Crouch. Croatia scored a 77th-minute winner.

Russia's unexpected loss against Israel on November 17 had meant England only needed to draw last night's game to join Croatia in the European championship finals being held in Switzerland and Austria in June. The Russians' 1-0 defeat of Andorra yesterday meant they overtook England to gain qualification.

England's failure will have "far-reaching consequences," according to Chadwick, a professor of sport business. "Sporting success is essential not only for the pleasure we get from it, but also for the psychological well-being and economic benefits it generates," Chadwick said in an e-mail yesterday.

Sport contributes about three percent of the UK's gross domestic product and workers are more productive when England does well, according to the professor.

Umbro outfitted the Brazil and England teams that won the four World Cups from 1958 to 1970 and today sponsors national sides from Sweden to Kuwait and six clubs, more than any rival, in England's Premier League, the world's richest soccer league.

The company ended competitor Admiral's decade-long run as uniform supplier to England in 1984.