JD Sports Fashion has successfully completed its acquisition of US sports retailer Hibbett, marking a significant step in its North American expansion strategy.
- The acquisition agreement, valued at $1.1 billion, was finalized following approval from Hibbett’s stockholders and the fulfillment of all remaining conditions.
- Hibbett, headquartered in Birmingham, Alabama, operates 1,169 stores across 36 states, contributing significantly to the combined entity’s revenue.
- The merger is projected to be earnings accretive from the first year, delivering at least $25 million in cost synergies in the medium term.
- Régis Schultz, CEO of JD Sports, emphasized the strategic importance of this acquisition to strengthen their presence in the North American market.
JD Sports Fashion has completed its acquisition of US-based sports retailer Hibbett, a move that represents a crucial component of JD Sports’ expansion within the North American market. This substantial transaction, valued at $1.1 billion or £878 million, was officially confirmed after gaining the necessary approval from Hibbett’s shareholders on July 19, alongside meeting all outstanding conditions for the merger.
Hibbett, which is based in Birmingham, Alabama, adds significant value to JD Sports by integrating 1,169 retail locations spread across 36 states into its portfolio. This expansion means a considerable increase in JD Sports’ market penetration within the United States. As of early May, Hibbett generated net sales amounting to $1.7 billion, with an EBITDA of $186 million and profit before tax reaching $132 million over a period of 53 weeks ending February 3, 2024.
The strategic benefits of this acquisition are substantial. It is expected to increase JD Sports’ revenue in North America to approximately £4.7 billion on a pro-forma basis. This expansion elevates the contribution of North America to JD Sports’ overall sales from 32% to 40%, showcasing a shift in the company’s revenue dynamics and geographical focus.
Moreover, the management team anticipates the acquisition to be earnings accretive from the first year, projecting cost synergies of at least $25 million in the medium term. This prediction highlights the financial prudence underlying this strategic decision, aiming to solidify JD Sports’ financial performance through enhanced efficiency and operational integration across the expanded network.
Régis Schultz, CEO of JD Sports, articulated the strategic importance of this acquisition, noting it as a pivotal milestone in their North American growth ambitions. He highlighted the complementary nature of Hibbett’s regional footprint with JD Sports’ existing community-focused brands, Shoe Palace and DTLR, located on the West and East Coasts, respectively. Schultz’s comments underscore JD Sports’ commitment to broadening its market base and strengthening its competitive positioning within the highly lucrative sportswear sector.
The acquisition of Hibbett by JD Sports marks a strategic milestone, significantly enhancing its market presence in North America.
