Three years ago, British retailer, JD Sports bought Finish Line for $558 million. Nearly, six weeks ago, they decided to also purchase San Jose, California-based company, Shoe Palace for $325 million. Now, JD Sports wanted to continue their US takeover by recently announcing their plan to buy DTLR Villa LLC for $495 million. Why do all of these acquisitions work for the burgeoning retailer?
Leisure wear has becoming increasingly popular over the past few years, especially during Covid-19. With most people working from home and only going out for essential reasons, the art of dressing up looks different. Leggings, yoga pants, sneakers, t-shirts – all core parts of athleisure wear, are a daily part of people’s wardrobe. If there was ever a time to make sure your name is known in the leisure wear industry, it is now. According to a June 2020 survey from CivicScience, one in five US adults have purchased clothing that is considered loungewear or leisurewear ever since the pandemic began.
The target market of all of these brands are millennials and nearly 30% of millennials (per the figures above) have already purchased leisurewear items with nearly 20% of millennials saying they will purchase items in the future. For JD Sports, they are hitting the market while the iron is hot, which is a wise decision
Purchasing Finish Line, not only opened JD Sports to 556 branded retail stores across 44 states and Puerto Rico and online, but also introduced them to Nike and Adidas, the heavyweights of leisurewear. Next, purchasing Shoe Palace, added 167 stores located in California, Texas, Nevada, Arizona, Colorado, New Mexico, to that growing network. The company also stated that this acquisition allowed for JD Sports to “strengthen its connection with Hispanic and Latino consumers who represent a significant proportion of Shoe Palace’s customer base”.
Now onto DTLR Villa LLC – about 3 years ago, DTLR, an “urban lifestyle retailer” merged with Philadelphia based company, Sneaker Villa. This merger formed one of the nation’s largest chains selling streetwear inspired clothing and shoes. Fast forward 3 years later, JD Sports now wants to acquire this chain which opens JD sports up to 247 stores across 19 states in the north and east of the US. Matt Powell, senior industry advisor of sports at the NPD Group states “Just like the Shoe Palace acquisition, DTLR [Villa] gives JD access to a geography where Finish Line was under-penetrated.” All 3 of these acquisitions position JD Sports to a variety of demographics in the U. S sports retail sector.
The future is bright for the British retailer. Their shares grew about 7% higher due to this acquisition, athleisure wear is in high demand among millennials and if JD Sports keeps making smart money moves, the takeover is inevitable.