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08/02/2021

Foot Locker Makes Two Acquisitions for $1.1B

Foot Locker is making two separate acquisitions totaling $1.1 billion.
Foot Locker exterior

The specialty athletic retailer has entered into a definitive agreement to acquire Text Trading Company, also known as “atmos,” a digitally led global retailer headquartered in Japan, for $360 million. The retailer has 49 stores, including 39 in Japan.

Separately, Foot Locker also announced it is acquiring U.S.-based athletic footwear and apparel retailer Eurostar, or WSS, for $750 million. WSS operates 93 off-mall retail locations in California, Texas, Arizona and Nevada. WSS reports $425 million in revenue in fiscal year 2020. The company also has a strong loyalty program, with roughly 80% of its sales coming from customers in the program. 

The California-based company focuses on serving the large and rapidly growing Hispanic consumer demographic. Foot Locker noted it will benefit from WSS’s “ differentiated market position and complementary customer base and real estate portfolio.” WSS will keep its name as part of Foot Locker’s portfolio, and the deal is expected to be finalized in the third quarter this year.

"WSS has built a successful, high-growth business by pioneering the neighborhood-based store model, built on community engagement and a full-family offering,” Richard Johnson, CEO and chairman of Foot Locker, said in a statement. “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. We are thrilled to welcome WSS's customers into the Foot Locker family, as well as join forces with their talented team. Looking ahead, we see significant opportunities to expand this business, including by accelerating WSS's store growth into new geographies in North America."

Foot Locker’s purchase of atmos will push the retailer further into Asia. Atmos reported $175 million in revenue in fiscal year 2020, with more than 60% of revenue coming from digital channels. The acquisition is expected to be accretive to Foot Locker’s earnings in 2021. Atmos will keep its name under Foot Locker, and the transaction is expected to close in the third quarter of 2021.

"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,” Johnson said. “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. We are thrilled to bring atmos into our portfolio of brands and build on the strong foundation of this differentiated business. We look forward to welcoming atmos's highly respected founder, Hidefumi Hommyo, who is considered one of the most influential people in streetwear and sneaker culture, along with the rest of the valued atmos team and their customers, to the Foot Locker family."

See the full story at Chain Store Age