Dick’s Sporting Goods is approaching an agreement to acquire Inc. for around 2.3 billion dollars, according to a report by Wall Street Journal.
The agreement would considerably modify the landscape of sports shoes – giving the major international presence of Dick and a huge lever effect with major brands like Nike and Adidas.
Foot Locker actions increased by 65% to $ 21.26 in after-sales exchange, while Dick Sports Sports Stock dropped from $ 5.1% to $ 198.99. It is not uncommon for a company about to make a big purchase to see its actions fall to news given the risks of integration involved.
According to the WSJ report, an agreement could be finalized as soon as Thursday, with Dick aimed at buying a locker on foot at $ 24 per share. It would be a premium of almost 90% of the current price of foot locker, which closed $ 12.87 on Wednesday.
Neil Saunders, managing director of GlobalData, described Dick’s Dick Dick offer “a daring decision to consolidate the power of the chain in the arena of sporting items and provide him with a stronger growth trajectory”.
“That said, if the purchase takes place, Dick’s would inherit a company that remains on the back,” said Saunders. “While Foot Locker has made progress in improving its stores and operations, its market share has dropped 1.8 percentage points since 2019 and the return is not yet fully at stake. However, this could be the advantage of Dick because it could design a recovery with its vast detail skills and add a significant value on the price it has offered.”
FN, the publication of the brothers and sisters of WWD, contacted the Sports of Foot Locker and Dick articles to comment.
In March, Foot Locker provided fourth quarter results above its previously revised expectations, because the company noted that investments and execution led positive comparable sales and an improvement in the “significant” gross margin compared to the previous year.
Total sales in the fourth quarter of 2024 were 2.24 billion dollars, down 5.8% against $ 2.38 billion by the same period in 2023.
For the full financial year of 2024, Foot Locker said that total turnover was $ 7.99 billion, compared to $ 8.17 billion in the year 2023. The net profit for continuous operations of the year was $ 18 million, against a loss of $ 330 million last year.
Foot Locker promoted Franklin Bracken to the role of the president to help accelerate the execution of his lace-up plan, the strategic plan set out in 2023 to raise the experience of OMNI-Détail, improve productivity and create a value for long-term shareholders.
If Dick’s and Foot Locker conclude an agreement, this would quickly come to the heels of skechers $ 9 billion in agreement with the Brazilian capital-investment company 3G Capital. The monumental agreement is considered to be the greatest repurchase of shoes in history.
The activity of the agreement comes at a time when the shoe industry, which is strongly exposed to China and other Asian production centers, is under intense pressure.
