Dick’s Sporting Goods may soon own Foot Locker. Dick’s and the struggling sneaker retailer have agreed to a $2.4 billion merger proposal.
According to the Wall Street Journal, Dick’s proposed buying Foot Locker stock at $24 per share. Dick’s will reportedly use both cash and new debt to finance the deal.
“We have long admired the cultural significance and brand equity that Foot Locker and its dedicated Stripers have built within the communities they serve,” said Dick’s executive chairman, Ed Stack. “We believe there is meaningful opportunity for growth ahead.”
Combined with Foot Locker, Dick’s Sporting Goods will substantially increase its store presence. At the end of last year, there were about 2,400 Foot Locker locations spread out across 26 countries.
As far as revenue, Dick’s is significantly bigger than Foot Locker. In the latest annual earnings report, Dick’s revealed $13.4 billion in revenue. Meanwhile, Foot Locker’s revenue was just under $8 billion. The Dick’s-Foot Locker merger is expected to close before the end of the year.
Dick’s Sporting Goods Is Saving Foot Locker From Financial Disaster
The offer from Dick’s Sporting Goods came at a suitable time for Foot Locker. The footwear retailer has been struggling to stay afloat.
Just before officially announcing the deal with Dick’s, Foot Locker released preliminary first-quarter earnings that were below expectations. For the three-month period that ended May 3, comparable sales fell 2.6% compared to the same quarter last year. The shoe chain projects an income loss of $363 million, substantially worse than the net income of $8 million earned in Q1 2024.
Despite the poor results, leadership at Dick’s seems confident with the decision to acquire Foot Locker. According to Stack, the company has the knowledge and the vision to turn Foot Locker’s dire situation around.
“We’re doing this from a position of strength and we think this can only improve what Foot Locker is doing and what we’re doing with Dick’s is not going to change,” stated Stack, per Retail Dive.
Prior to the deal announcement, Foot Locker intended to implement its own turnaround plan. The retailer initially revealed a commitment to open 80 new “reimagined” locations and remodel another 300 by the end of the year.
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