JD Sports to Acquire Hibbett in $1.1 Billion Deal: What It Means for the Athletic Retail Landscape
JD Sports’ $1.1 Billion Acquisition of Hibbett Could Reshape American Athletic Retail Landscape
In a move that could potentially shift the power dynamics in the American athletic retail industry, JD Sports announced on Tuesday its plans to acquire Hibbett in a deal valued at $1.1 billion. This acquisition is seen as a strategic fit by industry analysts, as Hibbett’s core urban fashion athletic customer base aligns well with JD’s DTLR and Shoe Palace banners.
Analyst Sam Poser from Williams Trading believes that JD Sports will benefit from Hibbett’s strong e-commerce and omnichannel platforms, which are considered among the best in the industry. Matt Powell, advisor at Spurwink River, also sees the combination of the two companies as a significant boost to their collective strength in the market.
However, this new alliance could spell trouble for competitors like Foot Locker, as JD Sports will now have increased leverage with vendors and is expected to continue gaining market share. With Foot Locker recently announcing delays in achieving its long-term financial targets, the competition is expected to intensify.
Following the completion of the acquisition, JD Sports’ presence in the U.S. will expand significantly, with Hibbett’s 1,169 stores across 36 states adding to its existing footprint. Despite this growth, JD Sports CEO Régis Schultz reassured analysts that there are no plans to rebrand Hibbett stores, emphasizing the importance of maintaining the unique propositions of each brand.
Chief Financial Officer Dominic Platt highlighted the strategic benefits of the acquisition, including expanding reach in the athleisure market, enhancing branded partnerships, and delivering synergy benefits over the medium term. The transaction is expected to close in the second half of 2024, at which point Hibbett will become a part of JD Sports and cease to be a publicly traded company.
Hibbett’s current leadership team, including President and CEO Mike Longo and COO Jared Briskin, will continue to lead the company from its headquarters in Birmingham, Ala. Longo expressed confidence in the merger, stating that it reinforces the strength of both brands and their commitment to serving communities and customers.
Overall, JD Sports’ acquisition of Hibbett is poised to reshape the American athletic retail landscape, creating a formidable competitor to industry giants like Foot Locker and Dick’s Sporting Goods. The deal represents a significant step forward for both companies and sets the stage for future growth and success in the market.
