JD Sports Fashion has proposed to buy American athletic fashion retailer Hibbett Inc for about $1.08 billion, reports Reuters. JD Sports will pay $87.50 per Hibbett share in cash, representing a premium of about 20 percent to the U.S. firm’s last closing price. The combined company would have a global portfolio of about 25 brands and North American revenue of about $5.9 billion. The deal is expected to close in the second half of this year, subject to regulatory and stockholder approvals.
Mike Longo will remain Hibbett’s chief executive officer, while Jared Briskin will shift from executive vice president of merchandising to serve as Hibbett’s chief operating officer, according to a company press release. Hibbett will no longer be a publicly traded company once the transaction closes and will maintain its corporate headquarters in Birmingham, Alabama.
Total Retail’s Take: JD Sports’ acquisition of Hibbett is the next step in its plan to grow U.S. market share. It already owns Shoe Palace, which has a big presence on the West Coast; DTLR, which is established in the East; and Finish Line, which has locations across 40 states and Puerto Rico. Hibbett operates about 1,169 stores across 36 U.S. states and will further the British sportswear retailer’s expansion across the southeastern U.S.
Hibbett and JD Sports look to be a good match. Anthony Crudele, chairman of the board of directors of Hibbett, said in a press release that the transaction with JD Sports will “create immediate, certain and substantial value for Hibbett stockholders while ensuring that our brands are well-positioned to continue to serve the customers and communities that have always been the central focus of Hibbett’s business.”
“We’re thrilled to acquire Hibbett City Gear, combining two of the most respected athletic retail brands in the United States” that will further enable JD Sports to meet the dynamic demands of consumers globally, added Régis Schultz, CEO of JD Sports.
The deal comes as shares in athletic clothing retailers come under pressure globally after weak outlooks from sports apparel makers such as Nike and Puma. Last month, JD’s U.S. rival Foot Locker also warned on 2024 profits, though Adidas last week hiked its 2024 forecast on strong demand.
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