Notable Calls: CIBC, Foot Locker and Moderna
Foot Locker Inc. agreed to buy a pair of footwear companies in two deals with a combined value of US$1.11 billion, expanding the chain’s presence in North America and Asia.
The athletic-goods retailer will pay US$750 million for Eurostar Inc., the operator of WSS stores primarily on the U.S. West Coast, according to a statement Monday. Foot Locker also agreed to acquire Text Trading Co., the Japanese parent of the Atmos brand, for US$360 million, the companies said in a separate news release. The deals will be funded with available cash.
The agreements mark a considerable expansion as Foot Locker tries to navigate a changing retail landscape with the COVID-19 pandemic beginning to subside. Widespread lockdowns hurt apparel retailers, many of which had to temporarily close stores, though the work-from-home trend fueled demand for so-called athleisure wear and other comfortable clothes.
Foot Locker has also been facing off against possible takeover interest from its largest shareholder, Czech billionaire Daniel Kretinsky’s Vesa Equity Investment S.a.r.l. The retailer adopted a poison-pill defense in December.
Foot Locker’s shares fell 1.6 per cent at 9:33 a.m. in New York.
WSS, which has 93 off-mall stores across California, Texas, Arizona and Nevada, generated 2020 sales of about US$425 million. Atmos, with 49 stores worldwide, had about US$175 million in sales last year. WSS and Atmos will maintain their respective brand names.
Both deals are expected to close late in the third quarter and will add to Foot Locker’s earnings per share in fiscal 2021, according to the statements.