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JD Sports Fashion has expanded its footprint in the US and acquired California based, privately owned Shoe Palace.
- The leading retailer and distributor of branded sportswear and fashionwear has made the acquisition for a consideration of $681 million.
- JD Sports will pay $325 million in cash while for the remaining $356 million it will issue a 20 per cent equity in its US subsidiary to the four brothers from the Mersho family, George, Ralph, John and Tony who own and had founded the company in 1993.
- As per the deal entered between the two parties, the Mersho family brothers will continue to operate the business of Shoe Palace. However, the JD Sports management team placed in the US will keep sharing their ideas and guidelines.
- Shoe Palace, which runs 167 stores in the US had generated revenue of $435 million and a pre-tax profit of $52 million for the year ending 31 December 2019.
- Commenting on the development, Executive Chairman of JD Sports Peter Cowgill has stated that Shoe Palace’ geographical spread and the reach within the Latino and Hispanic community majorly led to the acquisition decision.
- JD Sports had entered the US market in 2018 with the acquisition of Finish Line. The company recently acquired Livestock, a Canadian apparel company and before that Pretty Green in 2019.
- The stocks of JD Sports Fashion Plc (LON: JD.) on 16 December 2020, traded higher by 1.94% from its previous closing, hovering at around GBX 845.20 at 10:11 AM GMT+1.
