Foot Locker Inc. recently made headlines with its announcement to acquire two shoe store chains, WSS and Atmos, for a total of around $1.1 billion in cash. This strategic move by the footwear retailer is aimed at expanding its operations beyond malls and enhancing its position in the Asian market.

In an official statement, Foot Locker disclosed its plans to purchase WSS, a California-based shoe retailer, for $750 million. This acquisition will allow Foot Locker to tap into the significant Hispanic consumer base that WSS serves. With 93 off-mall stores spread across California, Texas, Arizona, and Nevada, WSS has established a strong presence in these regions.

Apart from WSS, Foot Locker will also acquire Atmos, a renowned Japanese streetwear retailer, for $360 million. Atmos is well-known for its collaborations with popular brands like Nike Inc., designing exclusive and limited edition footwear. This acquisition will not only boost Foot Locker’s presence in Japan but also provide access to Atmos’ 49 stores in the country.

The decision to acquire WSS and Atmos is timely, as the demand for sneakers and athletic gear in the United States is on the rise. With government stimulus measures further fueling this demand, Foot Locker has experienced robust sales performance. However, the company acknowledges the need to diversify its operations beyond malls, which have suffered due to the impact of the pandemic and the growth of online shopping.

By expanding through the acquisition of WSS and Atmos, Foot Locker aims to establish itself as a prominent player in the global footwear market. It intends to maintain the separate brand identities of both chains, leveraging their existing reputation and customer loyalty to drive growth and profitability.

To fund these acquisitions, Foot Locker will utilize its available cash reserves. The deals were initially reported by the Wall Street Journal and were facilitated by Evercore, acting as Foot Locker’s financial advisor, and RW Baird, advising WSS.

This strategic expansion move places Foot Locker in a strong position to enhance its market presence, diversify its customer base, and solidify its leadership position within the global footwear industry.

Sources:
Wall Street Journal
Foot Locker Corporate Website