Foot Locker’s $1.1 Billion Acquisition Binge
Foot Locker Inc. is making a $1.1 billion post-pandemic play — jumping into the ultra-hip Japanese sneakerhead scene with a deal to acquire Atmos and tapping into the growing U.S. Latine market by scooping up WSS.
While the pandemic isn’t over, retailers of all stripes have retooled over the past year and a half and are now positioning for what comes next.
In Foot Locker’s case, that clearly means pulling out its wallet for some high-level, all-cash dealmaking intended to make sure the company keeps evolving with the market.
Richard Johnson, chairman, president and chief executive officer of Foot Locker, said: “The way young people live their norms, values and attitudes has been the driving force behind the evolving retail landscape. And we are focused on zeroing in on this key part of our industry. Ensuring that Foot Locker is a place young people seek out for inspiration and empowerment will give us a vital link to remaining culturally connected and staying ahead of the curve in a sneaker ecosystem.”
The $360 million deal to buy Atmos brings the company to the world of premium fashion sneakers.
Atmos sales tallied $175 million last year with more than 60 percent of the take coming through the web. The company also has 49 stores, including 39 in Japan, where it was founded.
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Johnson said: “Atmos is uniquely positioned through its innovative retail stores, high-digital penetration and distinctive products that have made it a key influencer of youth and sneaker culture. With Atmos, we are executing against our expansion initiative in the rapidly growing Asia Pacific market, establishing a critical entry point in Japan and benefitting from immediate scale.”
The company’s founder, Hidefumi Hommyo, and the rest of the Atmos team are joining Foot Locker.
Hommyo said, “Atmos was founded in 2000 as a small retail store in the back streets of Ura-Harajuku. Our passion for sneaker culture and ability to connect with our customers have been the driving forces of our growth ever since. Importantly, Foot Locker shares this passion, and we are excited to join forces with them to propel Atmos into our next phase of growth.”
In a separate deal, Foot Locker signed a definitive agreement to acquire Eurostar Inc., WSS’ parent, for $750 million. The company has 93 off-mall stores targeting Latine consumers across California, Texas, Arizona and Nevada.
Johnson noted in a statement that: “WSS has built a successful, high-growth business by pioneering the neighborhood-based store model, built on community engagement and a full-family offering. This acquisition enhances our product mix and provides access to a customer base and store footprint that are both differentiated from and complementary to our current portfolio.”
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