Dick’s Sporting Goods to buy struggling shoe chain Foot Locker for $2.4 billion

By MICHELLE CHAPMAN AP Business Writer Dick s Sporting Goods is buying the struggling footwear chain Foot Locker for about billion the second buyout of a major footwear company in as plenty of weeks as business leaders struggle with uncertainty over U S President Donald Trump s tariffs Dick s disclosed Thursday that it expects to run Foot Locker as a standalone unit and keep the Foot Locker brands which include Kids Foot Locker Champs Sports WSS and Japanese sneaker brand atmos Sports and sports lifestyle continue to be incredibly powerful and with this acquisition we ll create a new global platform that serves those ever evolving requirements through iconic concepts consumers know and love enhanced store designs and omnichannel experiences as well as a product mix that appeals to our different customer bases Dick s CEO Lauren Hobart reported in a message Both companies are led by women Hobart became CEO at Dick s in while Mary Dillon has served as CEO of Foot Locker since Foot Locker broadcasted a turnaround plan in in part to help improve its relationship with big brands Speaking at the J P Morgan Retail Round Up Conference last month Dillon stated that Foot Locker is working closely with Nike specifically in categories including basketball sneaker tradition and kids Earlier this month Skechers reported that it was being taken private by the resources firm by G Capital in a transaction worth more than billion The retail industry has been growing increasingly concerned over Trump s pact war with other countries particularly China Athletic shoe makers have invested heavily in production in Asia Shares of sporting goods and athletic shoe companies have been under pressure all year Foot Locker s stock has plunged this year It is also facing pressure elsewhere with major athletic companies like Nike and Adidas shifting their sales strategies Skechers had fallen almost this year About of the clothes and shoes purchased in the U S are imported predominantly from Asia according to the American Apparel Footwear Association Using factories overseas has kept labor costs down for U S companies but neither they nor their overseas suppliers are likely to absorb price increases due to new tariffs Foot Locker based in New York City offers Dick s a lot of possible namely its huge real estate footprint and would give the Pittsburgh company its first foothold overseas Foot Locker has about retail stores across countries in North America Europe Asia Australia and New Zealand It also has a licensed store presence in Europe the Middle East and Asia The company had global sales of billion last year Jefferies analyst Jonathan Matuszewski revealed that about of Foot Locker s sales come from outside the United States He anticipates that the combined company would generate approximately of sales internationally on a pro forma basis The deal also broadens Dick s customer base with sneaker collectors anxiously anticipating new drops from Foot Locker Neil Saunders managing director of GlobalData noted in an emailed declaration that Foot Locker which has a share of the sporting goods region would give an immediate boost to Dick s It would also give Dick s substantially more bargaining power with national brands especially in the sneaker space he added Foot Locker shareholders can choose to receive either in cash or shares of Dick s common stock for each Foot Locker share that they own Dick s disclosed that it anticipates closing on the Foot Locker deal in the second half of the year The transaction still necessities approval from Foot Locker shareholders Dick s stock dropped more than before the area open while shares of Foot Locker surged more than