Dick’s Sporting Goods to buy Foot Locker for $2.4 billion
Dick’s Sporting Goods has made a bold move by acquiring struggling shoe company Foot Locker for $2.4 billion, marking the second major deal in the U.S. footwear industry in recent weeks. This acquisition comes at a time when the industry is facing challenges due to new tariffs imposed by the U.S. government.
The plan is for Dick’s to operate Foot Locker as a separate entity and retain its various brands, such as Kids Foot Locker, Champs Sports, WSS, and atmos. Dick’s CEO Lauren Hobart expressed excitement about the acquisition, emphasizing the opportunity to create a global platform that caters to the evolving needs of consumers through iconic concepts, enhanced store designs, and a diverse product mix.
Earlier this month, Skechers announced its privatization by investment firm 3G Capital in a deal valued at over $9 billion. The footwear industry has been on edge due to escalating trade tensions, especially with China, where many athletic shoe manufacturers have established production facilities.
Fall and Rise of Foot Locker
Foot Locker’s stock had been on a downward trend, with prices dropping by more than 40% this year before the Dick’s acquisition. However, following the announcement, Foot Locker shares surged by nearly 85% to $23.78, reflecting investor optimism.
Most clothing and footwear in the U.S. are imported from Asia, making the industry vulnerable to tariff hikes. Foot Locker’s extensive real estate presence and international reach present a lucrative opportunity for Dick’s to expand its market share and leverage its bargaining power with major brands.
With approximately 2,400 stores across 20 countries, Foot Locker generated $8 billion in global sales last year. The acquisition is expected to enhance Dick’s retail footprint and provide access to a wider customer base, particularly in malls and international markets.
Analysts believe that the merger will result in synergistic savings and strategic advantages for both companies. The deal is subject to approval from Foot Locker shareholders and is anticipated to be finalized in the second half of the year.
