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JD Sports acquires 167-store Shoe Palace in US

Tom Bottomley
15 December 2020

JD Sports has acquired 100% of US footwear retailer Shoe Palace, which has 167 stores in the US, for $325m (£244m).

The deal was done through JD Sports Fashion Plc’s existing wholly owned intermediate holding company in the United States, Genesis Holdings Inc.

Based in San Jose, California, Shoe Palace was established in 1993 by the Mersho family. More than half of its stores are located in California, though there is also an established retail presence in Texas, Nevada, Arizona, Florida, Colorado, New Mexico and Hawaii, with the store network supported by a developing ecommerce platform.

In the year to 31 December, 2019, Shoe Palace generated revenues of $435m (£327m). It delivered a profit before tax of $52m (£39m).

Total cash consideration for the acquisition of Shoe Palace, subject to customary cash/debt and working capital adjustments, is $325m (£244m) of which $100m (£75m) has been deferred and will be paid “on various dates” throughout the next 12 months.

Peter Cowgill, Executive Chairman of JD Sports Fashion Plc, said: “We are delighted to have completed the acquisition of Shoe Palace. The Shoe Palace team are ambitious, have great energy and pride themselves on their consumer connection and we welcome them to the Group.

“We are confident that our combined fascias will provide us with the flexibility and expertise to fulfil our mutual ambition of becoming a prime customer destination for sneakers and lifestyle apparel in the United States.”

The acquisition of Shoe Palace complements JD Sports’ developments in the US following the acquisition of Finish Line in 2018, and JD fascias in the United States, which include the recent opening of JD's flagship store in Times Square, New York.

In particular, the Shoe Palace acquisition will significantly increase the JD Group’s presence on the West Coast of the United States and “strengthen its connection with the Hispanic and Latino consumers” who represent a significant proportion of Shoe Palace's customer base.

George Mersho, CEO of Shoe Palace, added: "We could not imagine a better way to continue to build on the legacy of our family business. Through this combination with JD and Finish Line in the US, we have gained a strong global partner. We look forward to being part of the JD family and continuing to serve our customers and communities for many years to come."

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