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Foot Locker is buying two footwear store chains in a strategic deal that cost $1.1 billion. The sportswear and footwear retail company headquartered in New York City is reportedly paying in cash.
CNBC reported that the shoe stores that Foot Locker is acquiring are the WSS, formerly known as Warehouse Shoe Sale, which is based in California, and the Japanese sportswear and sneaker boutique, atmos. The amounts to be paid for the deal are $750 million and $360 million, respectively.
Foot Locker said on Monday, Aug. 2, that it is making the transactions to expand its business and be able to reach the Asia-Pacific. It also wants to focus beyond the malls and have an online shopping line since the COVID-19 pandemic slowed down foot traffic in physical retail outlets.
It was mentioned that WSS owns 93 off-mall stores in California, Nevada, Texas, and Arizona, and its customers are mostly Hispanic. With WSS in its portfolio, Foot Locker is looking to tap into this group of consumers.
As for atmos, it has 49 stores in Japan, and it is well-known to sell special edition shoe collections. The footwear designs are mostly in collaboration with leading brands such as Nike. This will help Foot Locker attain its goal of expansion in Asia.
"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,” Foot Locker chairman and chief executive officer, Richard A. Johnson, said in a press release, “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 an immediate scale.”
In any case, despite the acquisition, both WSS and atmos will continue to do business under their own names but will be operating as a new banner in Foot Locker's portfolio. Finally, Foot Locker’s deal with the two shoe companies is expected to be completed within the third quarter of this year and is said to be subject to the satisfaction of customary closing conditions.
