USA

JD Sports strengthens US reach with $1 billion bid for Hibbett

Unlock Editor's Digest for free

British sportswear chain JD Sports is accelerating its expansion into the United States by acquiring New York-listed rival Hibbett in a $1.1 billion deal. This is one of the company's largest acquisitions to date.

This move is part of CEO Regis Schulz's efforts to become a “global sports fashion powerhouse” after taking office in 2022.

Through many years of active acquisitions, JD Sports It has a presence in more than 30 countries, including the United States, where it now generates almost a third of its revenue.

JD Sports said the combined group's North American sales would be around £4.7bn, adding that the region's contribution to sales would increase to around 40%.

Alabama-based Hibbett has 1,169 stores in 36 states. For the year to February, the company had net sales of $1.7 billion and pre-tax profit of $131.6 million.

JD Sports, the UK's largest sportswear retailer, will pay $87.50 in cash for each Hibbett share.

The acquisition is expected to close in the second half of 2024 and will be the latest in JD's transatlantic operations.

The British sportswear chain opened its first five stores in the U.S. under the JD brand in 2018, and opened a flagship store in New York's Times Square in 2020.

Richard Chamberlain, an analyst at RBC Capital Markets, said that while the acquisition will increase JD's presence in the U.S. market, “The concern at this point is that JD is substituting some of its organic growth with M&A.'' ” he said.

He added that while JD currently only has a single-digit market share in the U.S., this means the partnership will increase the company's presence and “strengthen its ties with Nike.”

JD, which also has locations in Europe, Asia and Australia, has become a key partner for brands like Nike and Adidas as they seek to reach customers who don't shop in person.

Mike Longo will continue to serve as Hibbett's chief executive officer and president, while Jared Briskin will become chief operating officer of the U.S. company.

Summarize this content to 100 words Unlock Editor's Digest for freeFT editor Roula Khalaf has chosen her favorite stories in this weekly newsletter.British sportswear chain JD Sports is accelerating its expansion into the United States by acquiring New York-listed rival Hibbett in a $1.1 billion deal. This is one of the company's largest acquisitions to date.This move is part of CEO Regis Schulz's efforts to become a “global sports fashion powerhouse” after taking office in 2022. Through many years of active acquisitions, JD Sports It has a presence in more than 30 countries, including the United States, where it now generates almost a third of its revenue.JD Sports said the combined group's North American sales would be around £4.7bn, adding that the region's contribution to sales would increase to around 40%. Alabama-based Hibbett has 1,169 stores in 36 states. For the year to February, the company had net sales of $1.7 billion and pre-tax profit of $131.6 million.JD Sports, the UK's largest sportswear retailer, will pay $87.50 in cash for each Hibbett share.The acquisition is expected to close in the second half of 2024 and will be the latest in JD's transatlantic operations.The British sportswear chain opened its first five stores in the U.S. under the JD brand in 2018, and opened a flagship store in New York's Times Square in 2020.Richard Chamberlain, an analyst at RBC Capital Markets, said that while the acquisition will increase JD's presence in the U.S. market, “The concern at this point is that JD is substituting some of its organic growth with M&A.'' ” he said.He added that while JD currently only has a single-digit market share in the U.S., this means the partnership will increase the company's presence and “strengthen its ties with Nike.”JD, which also has locations in Europe, Asia and Australia, has become a key partner for brands like Nike and Adidas as they seek to reach customers who don't shop in person.Mike Longo will continue to serve as Hibbett's chief executive officer and president, while Jared Briskin will become chief operating officer of the U.S. company.
https://www.ft.com/content/6cbab2c1-bb8d-43c0-847f-96bb19f6ec4d JD Sports strengthens US reach with $1 billion bid for Hibbett

Back to top button