JD Sports Fashion is set to acquire Alabama-based athletic fashion retailer Hibbett Inc. for about $1.08 billion. The deal will allow JD Sports to expand its presence in the south-eastern U.S. and increase its total sales contribution from the region. It is expected to boost the British firm's earnings in the first year of ownership, with cost savings of at least $25 million. JD Sports CEO Régis Schultz has emphasized the strategic and financial benefits of the acquisition, which align with the company's growth plans in Europe and the U.S.
Key Takeaways
- JD Sports Fashion to acquire Alabama-based retailer Hibbett Inc. for around $1.08 billion.
- The deal would increase JD Sports' presence in the south-eastern U.S. and boost sales in North America.
- Expected combined revenues of about $5.8 billion and cost savings of at least $25 million.
- The acquisition accelerates JD Sports' growth plans in the U.S. and is expected to be earnings accretive from year one.
- Schultz aims to open 350 new stores per year, focusing on North American and European markets for expansion.
Analysis
JD Sports Fashion's acquisition of Hibbett Inc. in Alabama for $1.08 billion is aimed at expanding its market presence in the south-eastern U.S. and increasing total sales contributions from the region. This strategic move aligns with JD Sports' growth plans in Europe and the U.S., as emphasized by CEO Régis Schultz. Short-term benefits include earnings accretion and cost savings of at least $25 million. The deal is expected to boost combined revenues to about $5.8 billion, impacting the company's financial performance positively in the long term. The expansion may also create opportunities for job growth and impact the retail landscape in the targeted regions.
Did You Know?
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Earnings Accretive: Refers to an acquisition or investment that is expected to increase the earnings per share of the acquiring company. This means that the acquisition of Hibbett Inc. is projected to positively impact JD Sports Fashion's earnings in the first year of ownership.
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Cost Savings: This term denotes the reduction in expenses or spending achieved through improved efficiency and strategic initiatives. In the context of the acquisition, JD Sports Fashion anticipates achieving at least $25 million in cost savings, which can contribute to its overall profitability.
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Presence Expansion: JD Sports Fashion's acquisition of Hibbett Inc. is aimed at increasing the company's market presence in the south-eastern U.S. This strategic move will enable JD Sports to expand its retail footprint and capture a larger share of the athletic fashion market in North America.