Dick's-Foot Locker
Share this @internewscast.com

Struggling footwear chain Foot Locker is set to be acquired by Dick’s Sporting Goods for approximately $2.4 billion. This marks the second significant acquisition of a footwear brand in recent weeks as leaders navigate the challenges posed by President Donald Trump’s tariffs.

On Thursday, Dick’s announced its intention to operate Foot Locker as an independent entity, while maintaining its associated brands like Kids Foot Locker, Champs Sports, WSS, and the Japanese sneaker label atmos.

“The influence of sports and sports culture remains incredibly strong. Through this acquisition, we aim to establish a new global platform catering to these evolving demands with the beloved concepts consumers cherish. This includes improved store designs, omnichannel experiences, and a diverse product range that connects with our various customer segments,” stated Dick’s CEO Lauren Hobart.

Both companies are led by women. Hobart became CEO at Dick’s in 2021, while Mary Dillon has served as CEO of Foot Locker since 2022.

Foot Locker announced a turnaround plan in 2023 in part to help improve its relationship with big brands. Speaking at the J.P. Morgan Retail Round Up Conference last month, Dillon said that Foot Locker is working closely with Nike, specifically in categories including basketball, sneaker culture and kids.

Earlier this month Skechers announced that it was being taken private by the investment firm by 3G Capital in a transaction worth more than $9 billion.

Dick's-Foot Locker
This photo taken Tuesday, Aug. 29, 2017, shows a Dick’s Sporting Goods sign at a store in Miami. (AP Photo/Alan Diaz, File)

The retail industry has been growing increasingly concerned over Trump’s trade war with other countries, particularly China. Athletic shoe makers have invested heavily in production in Asia.

Shares of sporting goods and athletic shoe companies have been under pressure all year. Foot Locker’s stock has plunged 41% this year. It is also facing pressure elsewhere, with major athletic companies like Nike and Adidas shifting their sales strategies.

Skechers had fallen almost 8% this year.

About 97% of the clothes and shoes purchased in the U.S. are imported, predominantly from Asia, according to the American Apparel & Footwear Association. Using factories overseas has kept labor costs down for U.S. companies, but neither they nor their overseas suppliers are likely to absorb price increases due to new tariffs.

Foot Locker, based in New York City, offers Dick’s a lot of potential, namely its huge real estate footprint, and would give the Pittsburgh company its first foothold overseas.

Foot Locker has about 2,400 retail stores across 20 countries in North America, Europe, Asia, Australia and New Zealand. It also has a licensed store presence in Europe, the Middle East and Asia. The company had global sales of $8 billion last year.

Jefferies analyst Jonathan Matuszewski said that about 33% of Foot Locker’s sales come from outside the United States. He anticipates that the combined company would generate approximately 12% of sales internationally on a pro forma basis.

The deal also broadens Dick’s customer base, with sneaker collectors anxiously anticipating new drops from Foot Locker.

Neil Saunders, managing director of GlobalData, said in an emailed statement that Foot Locker, which has a 4.3% share of the sporting goods market, would give an immediate boost to Dick’s.

“It would also give Dick’s substantially more bargaining power with national brands, especially in the sneaker space,” he added.

Foot Locker shareholders can choose to receive either $24 in cash or 0.1168 shares of Dick’s common stock for each Foot Locker share that they own.

Dick’s said that it anticipates closing on the Foot Locker deal in the second half of the year. The transaction still needs approval from Foot Locker shareholders.

Dick’s stock dropped more than 10% before the market open, while shares of Foot Locker surged more than 82%.

Share this @internewscast.com
You May Also Like

Surveillance Footage Captures Bryan Kohberger at Costco Following Homicides

() Newly-released surveillance video shows Bryan Kohberger visiting multiple stores hours after…

Los Angeles Zoo Welcomes Newborn Chimp Twins

IE 11 is not supported. For the best experience, please visit our…

Hong Kong Legislators Approve Ban on Low-Quality Micro Apartments

HONG KONG – Hong Kong legislators approved a bill on Friday that…

Second Harvest Food Bank Initiates 24-Hour Marathon to Combat Hunger in Central Florida

ORLANDO, Fla. – For the first time in its 43-year history, Second…

LIVE STREAM: Trooper Steve Prepares to Participate in the Red Bull Tandem Rollercoaster Challenge

ALTAMONTE SPRINGS, Fla. – The Red Bull Tandem Rollercoaster event is set…

Adella Bird Secures Athlete of the Week Honors from WCIA 3

MAHOMET, Ill. (WCIA) — Mahomet-Seymour’s Adella Bird has seen big growth on…

Thune claims a shutdown is still preventable if Democrats reduce their demands

WASHINGTON (AP) — Senate Majority Leader John Thune is dismissing the Democratic…

Las Vegas Flight Crew Uses Duct Tape to Restrain Passenger in Her Seat

LAS VEGAS (KLAS) A federal judge has ordered the detention of a…

Weezer Bassist’s Wife Accused of Shooting at Police Escapes Jail Time

An author and spouse of a well-known musician, who purportedly shot at…

Trump Addresses Indictments Following Comey Investigation

IE 11 is not supported. For an optimal experience visit our site…

Netanyahu’s U.N. Speech Streamed into Gaza

IE 11 is no longer supported. For the best experience, please visit…

“St. Pete City Council Takes Action to Protect Local Science Center Amidst Threats”

The City of St. Petersburg, Florida, is revisiting the proposal regarding the…