Dive Brief:

• JD Sports Fashion, a sportswear retailer based in the United Kingdom, has agreed to acquire Finish Line for about $558 million, the companies said Monday in a press release. 

• The merger agreement, for 100% of Finish Line's stock, is subject to shareholder approval at both companies, as well as required regulatory approvals and customary closing conditions, according to the release. The deal is expected close by June 2018 at the earliest. After the deal, the Finish Line executive team would continue their involvement with the business, the companies said.

• The deal would snatch away the interest acquired last year by U.K. sports retailer Sports Direct, which last April acquired a 7.9% stake in Finish Line, making it the U.S. company's fifth-largest shareholder currently. 

Dive Insight:

With the buyout, Finish Line expects to benefit from the robustness of JD, which is one of Europe's biggest sportswear retailers. Meanwhile, the deal opens up a path for JD to gain a foothold in the U.S., the companies said. 

"This makes JD a very strong partner for sports brands now," Matt Powell, vice president and senior industry advisor at The NPD Group, told Retail Dive in an email on Monday. "Good news for both Finish Line and JD."

Finish Line runs some 930 locations in U.S. malls, including its branded retail stores plus shops inside Macy's department stores.

Finish Line also said on Monday that fourth quarter net sales rose 0.7% year over year to $561.3 million, driven by an 8.5% increase in Finish Line Macy's sales, while same-store sales in the quarter fell 7.9%. For the year, net sales fell 0.3% to $1.84 billion, as the mainline stores dragged down increased sales at Macy's. Full-year same-store sales fell 3.9%.

The company finished off last year with a major inventory management revamp around its in-store and online merchandise assortment. 

Coming out of a holiday period that saw all brands drastically reducing prices and still finding it difficult to get shoppers to buy, the market for shoes and sportswear continues to face challenges in coming up with appealing design and performance attributes, Powell warned early in the year.

Pulling back from last year's heavy discounts will cost some sales in the short term, but focusing more on leisure styles and on women will eventually help them overcome that, Powell said in January.