JD Sports Fashion, the UK’s largest sportswear retailer, has announced its proposal to acquire American athletic fashion retailer Hibbett Inc for around $1.08 billion. This strategic move comes as JD Sports aims to expand its presence in the southeastern United States and tap into the growing demand for athletic clothing in North America.
The deal is seen as a positive step for JD Sports, which has been optimistic about the market picking up momentum with events like the Euro soccer championships, Paris Olympics, and the introduction of new styles of trainers and track suits. The acquisition of Hibbett, which operates about 1,169 stores across 36 U.S. states, will significantly expand JD Sports’ geographic presence in the country and contribute to its earnings in the first year of ownership.
Shares in athletic clothing retailers have come under pressure globally due to weak outlooks from major sports apparel makers like Nike and Puma. However, there was positive news from Adidas, which raised its 2024 forecast due to strong demand for its sneakers. Foot Locker also issued a warning on profits for 2024. Despite this challenge, JD Sports remains optimistic about the market and believes that it can benefit from consolidation with other players in the industry.
JD Sports will pay $87.50 per Hibbett share in cash, offering a premium of about 20% to Hibbett’s last closing price. Hibbett’s shares jumped 18% to $85.70 in premarket U.S. trading following the announcement, indicating investor confidence in the deal’s potential success. To fund this acquisition and refinance Hibbett’s current debt, JD Sports will use its U