JD Sports is to acquire US sportswear retailer Hibbett for £899 million
- JD Sports has agreed to pay $87.50 per share to buy Alabama-based Hibbett
- The company has embarked on an extensive acquisition wave in recent years
JD Sports plans to acquire US retailer Hibbett in a $1.09 billion (£899 million) deal aimed at expanding its reach in North America.
The sporting goods giant, known as the “King of Trainers,” has agreed to spend $87.50 per share on the acquisition of Hibbett, which is expected to close in the second half of this year.
JD Sports said the expanded business would generate around £4.7 billion in sales from North America, while increasing its share of sales from the region by around eight percentage points to 40 percent.
Acquisition deal: Hibbett, owner of the City Gear company, sells fashion and accessories from major brands such as Nike, Jordan and Adidas in more than 1,100 stores in 36 states
It plans to finance the purchase and Hibbett debt with “existing U.S. cash resources” of $300 million and an expansion of banking facilities by $1 billion.
The company believes the acquisition will be “profitably accretive” in the first full year of ownership and deliver annual cost savings of at least $25 million.
Based in Birmingham, Alabama, Hibbett sells fashion and accessories from major brands such as Nike, Jordan and Adidas in more than 1,100 stores in 36 states.
In the 53 weeks ended February 2, the FTSE 100 group, which also owns the City Gear and Sports Additions brands, posted $1.73 billion in net sales and pre-tax profits of $131.6 million.
Régis Schultz, CEO of JD Sports, said: “Hibbett’s footprint is highly complementary and provides a stronger presence in communities across the southeastern US, where we currently have a limited presence.”
The Bury-headquartered company has embarked on an extensive acquisition spree in recent years, particularly in North America, where it has bought retail chains DTLR and Finish Line, as well as California’s Shoe Palace.
Outside the continent, it has acquired a majority stake in Missy Empire, Spanish online retailer Deporvillage and Greek retailer Cosmos Sport.
These acquisitions all took place under the leadership of Peter Cowgill, who presided over the tremendous growth at JD Sports before stepping down as chairman and CEO in May 2022.
Since Schultz took over, JD Sports has acquired French companies Gap and Courir and acquired full ownership of Iberian Sports Retail Group.
JD Sports Fashion Stocks were 6.1 per cent higher at 125.7p on Tuesday morning, but have fallen by around 21 per cent since the start of the year.
Last month, JD Sports reported that like-for-like sales rose 4.2 percent in the fiscal year ended in February thanks to growth across all regions, but were flat in the fourth quarter.
Earlier this year the company warned that annual profits would not exceed £1 billion due to milder weather and significant competition in the run-up to Christmas.