JD Sports Fashion PLC has acquired Shoe Palace Corp.
The British sportswear retail giant — which also owns Finish Line — said early today it is snapping up the San Jose, Calif.-based company for $325 million.
Under the terms of the deal, $100 million has been deferred and will be paid on various dates over the next 12 months. In addition, the deal gives the founding Mersho family equity equivalent to 20% of JD’s U.S. operations, worth $356 million.
JD said the Mersho family will continue to manage the Shoe Palace business, but that the teams “will begin to share ideas and best practices as we look to create an unrivaled proposition which connects with all relevant consumers.”
In the year ended Dec. 31, 2019, Shoe Palace generated revenues of $435 million.
Shoe Palace has 167 stores, and a majority are located in California. The company also has a presence throughout the West and South, including Texas, Nevada, Arizona, Florida, Colorado, New Mexico and Hawaii.
In the statement, JD said the acquisition will significantly increase its West Coast presence and “strengthen its connection with the Hispanic and Latino consumers, who represent a significant proportion of Shoe Palace’s customer base.”
”The Shoe Palace team [is] ambitious, have great energy and pride themselves on their consumer connection, and we welcome them to the group,” JD Sports executive chairman Peter Cowgill said in a statement. “We are confident that our combined fascias will provide us with the flexibility and expertise to fulfill our mutual ambition of becoming a prime customer destination for sneakers and lifestyle apparel in the United States.”
JD Sports has worked to make inroads in the U.S. market since March 2018 when it snapped up Finish Line Inc. in a $558 million deal.
Since the acquisition, the British retailer has turned existing Finish Line storefronts into JD doors and opened a JD flagship store in Times Square in October. — With contributions from Sam Conti