In breaking news, UK retailer JD Sports has acquired privately owned US footwear retailer Shoe Palace for $681 million USD. According to Reuters, the key reasons for the acquisition was determined by geographic concentration and exposure to Latino and Hispanic communities.
“It helps us expand our reach and focus in what is the homeland of athletic leisurewear,” Peter Cowgill, executive chairman of JD Sports, stated in the report.
JD Sports will pay the four Mersho brothers, who have been running the Shoe Palace business since their father founded it in 1993, a cash amount of $325 million, including $100 million paid in installments over the coming year. In addition, the company will give the four brothers a 20 percent equity stake in JD Sports’ US subsidiary, valued at $356 million. The four brothers will continue to stay on to help merge the business with JD’s existing management team.
JD Sports hopes this move will increase their exposure in key US markets, considering Shoe Palace currently has 167 stores, with more than half located on the West Coast. Additionally, the stores are located in Texas, Nevada, Arizona, Florida, Colorado, New Mexico, and Hawaii. According to the report, Shoe Palace generated $435m in revenues and a pre-tax profit of $52m in the year leading up to December 31, 2019.
Cowgill additionally shared, “We are delighted to have completed the acquisition of Shoe Palace. The Shoe Palace team are ambitious, have great energy, and pride themselves on their consumer connection and we welcome them to the group.
We are confident that our combined fascias will provide us with the flexibility and expertise to fulfill our mutual ambition of becoming a prime customer destination for sneakers and lifestyle apparel in the United States.
We look forward to being part of the JD family and continuing to serve our customers and communities for many years to come.”
Along with acquiring Shoe Palace, JD Sports additionally purchased Finish Line back in 2018 for $560 million.
FULL DISCLOSURE:
It has come to our attention that some outlets have reported that Nice Kicks was also part of the sale of Shoe Palace to JD Sports. Nice Kicks, LLC is an independent entity and a separate company from Nice Kicks retail stores which were purchased by the Mersho family (owners of Shoe Palace in 2014).
Nice Kicks LLC, NiceKicks.com, and @nicekicks social media accounts were not part of the sale reported above.
