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December 15, 2020updated 28 Jul 2022 9:29am

JD Sports acquires US-based footwear retailer Shoe Palace

UK-based sportswear retailer JD Sports has acquired a 100% stake in US company Shoe Palace for $325m (£240m) in cash.

By Jessica Paige

UK-based sportswear retailer JD Sports has acquired a 100% stake in US company Shoe Palace for $325m (£240m) in cash.

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Half of the Shoe Palace’s stores are located in California with others in Texas, Nevada, Arizona, Florida, Colorado, New Mexico, and Hawaii. The retailer is operated by the Mersho brothers, who have been issued with equity in JD Sports’ US unit Genesis Holdings. The Mersho Brothers will continue to manage Shoe Palace for the foreseeable future.

Of the $325m purchase, $100m has been deferred to be paid throughout 2021. According to JD Sports, the purchase was funded with cash resources and existing bank facilities.

Response to the deal

JD Sports executive chairman Peter Cowgill said: “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 fulfil our mutual ambition of becoming a prime customer destination for sneakers and lifestyle apparel in the United States.”

Shoe Palace CEO George Mersho said: “We could not imagine a better way to continue to build on the legacy of our family business. Through this combination with JD and Finish Line in the US, we have gained a strong global partner. We look forward to being part of the JD family and continuing to serve our customers and communities for many years to come.”

JD Sports and Shoe Palace value

In 2019, Shoe Palace reported a profit before tax of $52m with gross assets at $197m. JD Sports had a profit before tax and exceptional items of £158.6m.

After announcing that it is acquiring Shoe Palace, JD Sports’ share prices have gone up by 5%. They currently stand at 790.6p per share.

Analysts from UK-based investment bank Peel Hunt said the deal is “a great fit for JD: Finish Line has a weakness on the West Coast and doesn’t really connect with the shoppers Shoe Palace is close to.|”

Finish Line is a US-based retailer previously acquired by JD Sports.

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Walmart: Going Beyond Company Disclosures

Walmart has rounded out its fiscal year with a strong set of numbers that show it has taken supply chain disruption, rising costs, heavy inflation, and various other problems in its stride. There is comfortable growth on both the top and bottom lines, which is extremely respectable given tough prior year comparatives. Walmart hiring is slowing down as compared to hiring in the months of April and March in 2022. Walmart posted close to 40,000 vacancies in March and 30,000 in April, which has gone below 10,000 in June 2022. Walmart Company Filings has most of the mentions related to the ESG and COVID-19 themes in 2021. ESG has more than 300 mentions in the company’s 2021 filings which indicates the rising focus on ESG-related issues. Our report on Walmart: Going Beyond Company Disclosures, demonstrates GlobalData Explorer’s ability to:  
  • Track and monitor a company’s movements through alternative indicators to gain insights into the strategy before it is disclosed by the company
  • Gain insight into a company’s capital deployment strategy, by assessing historical deal volumes and specific transactions executed by the company, in addition to identifying sectors of focus
  • Go beyond basic financial information, to access key industry-relevant indicators for a company and how these have progressed over time
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
by GlobalData
Enter your details here to receive your free Report.