15th Dec 2020 08:41
(Alliance News) - JD Sports Fashion PLC said Tuesday it has agreed to buy San Jose, California-based Shoe Palace for USD325 million.
Of the cash consideration, USD100 million has been deferred and will be paid over the next 12 months. JD Sports said the acquisition will be funded from its existing cash resources and bank facilities.
For 2019, Shoe Palace delivered pretax profit of USD52 million on revenue of USD435 million. It was started in 1993 by the Mersho family and has 167 stores, most of which are under the Shoe Palace brand. About half the stores are in California, with some presence in seven other US states.
Shoe Palace will continue to be run by four brothers from the Mersho family but will start to share ideas with JD's other US operation, JD Finish Line, from next year.
"The acquisition of Shoe Palace complements the group's ongoing positive developments from the existing Finish Line and JD fascias in the United States, which includes the recent opening of JD's flagship store in Times Square, New York," said JD Sports.
Added Executive Chair 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 United States."
JD Sports shares were up 3.8% early Tuesday in London at 820.60 pence, making the stock the top performer in the FTSE 100.
By Tom Waite; [email protected]
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