Update: Sept. 20, 2021 at 10:45 a.m. ET
Foot Locker Inc. has completed its acquisition of WSS.
The retail giant announced today that the WSS acquisition has been completed for $750 million in cash, subject to customary adjustments. According to Foot Locker, WSS will maintain its name and operate as a new brand within the Foot Locker Inc. portfolio.
Additionally, Foot Locker announced the appointment of Anthony Aversa to COO of WSS, effective immediately. He will report to WSS SVP and GM Rick Mina, and in the role will oversee its market planning, real estate and customer experience functions. Prior to assuming this role, Aversa was the VP of customer experience of Foot Locker North America.
“WSS is a highly complementary addition to our portfolio, and we are excited to officially welcome its team to the Foot Locker family,” Foot Locker chairman and CEO Dick Johnson said in a statement. “WSS brings an expanded and differentiated customer base rooted in the rapidly growing Hispanic community, diversifies and enhances our product mix, and strengthens our footprint with a 100% off-mall store fleet located in key markets. We look forward to building on WSS’ deep community connections, as we accelerate its growth and drive significant additional long-term value for our shareholders.”
What We Originally Reported on Aug. 2
Foot Locker Inc. has made a pair of acquisitions to help bolster its footprint both stateside and abroad.
The athletic retail giant said today that it is acquiring WSS (Eurostar Inc.) for $750 million in cash. Foot Locker also announced the acquisition of Atmos (Text Trading Company K.K.) for $360 million, which also will be a cash deal.
Foot Locker said it will benefit from the addition of WSS, which has 93 off-mall stores throughout the West Coast in states including California, Texas, Arizona and Nevada, because of its “differentiated market position and complementary customer base and real estate portfolio.” WSS will maintain its name, according to Foot Locker, and will operate as a new banner in its portfolio.
What’s more, Foot Locker — which also owns Eastbay and Champs Sports — said it will benefit from the relationships WSS has with its consumers. Roughly 80% of its sales come from loyalty program members, and WSS has a large and growing Hispanic demographic. The acquisition will also allow Foot Locker Inc. to further diversify its product mix, resulting in serving a broader range of consumers across price points. WSS President Rick Mina, a former top executive at Foot Locker, has spent the last several years helming the chain and growing it into a formidable competitor.
According to Foot Locker, WSS hit about $425 million in revenue in fiscal year 2020. With the acquisition, Foot Locker expects to see an earnings per share boost in fiscal year 2021.
The deal is expected to close late in late Q3 2021.
“WSS has built a successful, high-growth business by pioneering the neighborhood-based store model, built on community engagement and a full-family offering. This acquisition enhances our product mix and provides access to a customer base and store footprint that are both differentiated from and complementary to our current portfolio,” Foot Locker Inc. Chairman and CEO Dick Johnson said in a statement. “We are thrilled to welcome WSS’s customers into the Foot Locker family, as well as join forces with their talented team. Looking ahead, we see significant opportunities to expand this business, including by accelerating WSS’s store growth into new geographies in North America.”
As for Atmos — which offers premium sneakers and apparel as well as an in-house label — Foot Locker said the acquisition will broaden its global reach and presence in Japan, and extend its premium and top-tier offering. Atmos currently operates 49 stores globally, which includes 39 in Japan under the Atmos banner as well as Atmos Pink, which is its women’s brand.
According to Foot Locker, Atmos will maintain its name and operate as one of the banners in its portfolio. The transaction is expected to close late Q3 2021.
According to Foot Locker, Atmos hit roughly $175 million in revenue in fiscal year 2020, with more than 60% coming through its digital channels.
“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. 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 immediate scale,” Johnson said in a statement. “We are thrilled to bring Atmos into our portfolio of brands and build on the strong foundation of this differentiated business. We look forward to welcoming Atmos’s highly respected founder, Hidefumi Hommyo, who is considered one of the most influential people in streetwear and sneaker culture, along with the rest of the valued Atmos team and their customers, to the Foot Locker family.”
Consolidation continues to accelerate across the athletic landscape. Last year, JD Sports, owner of The Finish Line, acquired DTLR and Shoe Palace.