JD Sports expands US footprint with purchase of Shoe Palace for $325m
JD Sports has agreed to buy California-based sportswear brand Shoe Palace in an all-cash deal worth $325m (£243.7m), the company has announced.
Genesis, the US owner of JD Sports, will acquire the 100 per cent of both Shoe Palace shares, plus members’ interests in youth-focused subsidiary Nice Kicks.
Around $100m of the cash consideration, which is being funded from the group’s cash resources and existing bank facilities, has been deferred and will be paid on various
dates over the next 12 months.
Shoe Palace was founded in 1993 by a family of four Mersho brothers, and has 167 stores across southern states including California, Texas, Florida and Nevada, alongside a strong online presence.
The Mersho Brothers have also been issued with equity in Genesis as part of the deal, meaning they will own 20 per cent of the enlarged group in the US — worth $356m.
The agreement also includes future exit clauses for the family, starting at the end of the financial year to 1 February 2025.
The company said the deal would expand its footprint in the US West Coast and increase its appeal among Hispanic and Latino consumers, who form a significant proportion of Shoe Palace’s customer base.
‘’We are delighted to have completed the acquisition of Shoe Palace. The Shoe Palace team are ambitious, have great energy and pride themselves on their consumer connection and we welcome them to the group,” said JD Sports chairman Peter Cowgill.
“We are confident that our combined fascias will provide us with the flexibility and expertise to fulfil our mutual ambition of becoming a prime customer destination for sneakers and lifestyle apparel in the US.”
The takeover will join the group’s Finish Line and JD Sports chains in the country, which recently saw a new JD flagship open in New York’s Times Square.
It comes after JD earlier this month pulled out of talks to buy beleaguered British department chain Debenhams, triggering the collapse of other High Street stalwarts including Sir Philip Green’s Arcadia.
JD had been the final potential bidder for the group and its decision to withdraw from the race proved the final straw in its collapse.