Dive Brief:
- U.K.-based JD Sports plans to buy U.S.-based athletic retailer Hibbett Inc. for $1.1 billion, the companies said in a Tuesday announcement. JD Sports will acquire all of Hibbett’s outstanding shares in cash. 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. Hibbett will no longer be a publicly traded company once the transaction closes and will maintain its corporate headquarters in Birmingham, Alabama.
- JD Sports CEO Régis Schultz described Hibbett’s store footprint as “highly complementary” and said the deal will provide a stronger platform for JD’s expansion in the U.S., especially in the Southeast where JD currently has a limited presence.
Dive Insight:
JD Sports’ acquisition of Hibbett represents a logical next step in the U.K. company’s strategic growth plans and will enable it to meet the dynamic demands of global consumers, according to Schultz. The retailer has acquired multiple U.S. rivals in recent years. It bought Finish Line in 2018 for $558 million, Shoe Palace in 2020 for $681 million and DTLR in 2021 for $495 million.
“The addition of Hibbett to the JD family will provide a big boost to the US business and gives JD Sports a presence in a lot of markets where it is currently underrepresented,” Neil Saunders, managing director of GlobalData, said in emailed comments. “Although Hibbett has a very strong sneaker business, the acquisition will also allow JD to play to its strengths in the sports fashion and athleticwear arenas.”
JD’s overall portfolio includes more than 20 brands. Hibbett also owns City Gear and Sports Additions. The combined revenues of JD and Hibbett in North America would be approximately 4.7 billion pounds ($5.9 billion), according to the companies. That would increase JD’s North American share of overall sales from about 32% to 40%. JD said the acquisition will also help the company strengthen relationships with brand partners.
“JD Sports is a well-respected global leader in athletic footwear and fashion that, like us, is committed to the communities and customers it serves,” Hibbett’s Longo said in a statement. “We are thrilled to begin this new chapter with JD Sports, and believe the transaction will enable us to fulfill our customer-oriented mission even more effectively for years to come.”
Established in 1981, JD Sports had 3,313 stores globally as of March 2. The company reported annual sales rose 3.6% to 10.5 billion pounds for its most recent fiscal year. Hibbett’s net sales for the year ended Feb. 3 rose 1.2% to $1.73 billion compared with $1.71 billion for the prior year. The retailer, in business for over 75 years, reported its comparable sales fell 3.1% versus the prior year, with brick-and-mortar comps declining 4.4% and e-commerce sales increasing 4.1%. Hibbett had 1,169 stores in 36 states as of Feb. 3.
JD Sports’ Schultz said in a March earnings announcement that the athletic and sports retail market environment “remains challenging due to less product innovation and elevated promotional activity, especially online. We anticipate trading conditions will improve as we move through the year, helped by a busy sporting summer and softer comparatives with last year.”
