Foot Locker is significantly expanding its product selection and footprint through a pair of acquisitions that are valued at a combined total of more than $1.1 billion. Eurostar, which Foot Locker will acquire for $750 million, will diversify the retailer’s product mix and help it serve a wider range of price points through its WSS stores. Text Trading Company, K.K., with a $360 million price tag, will give the retailer a foothold in Japan as well as access to the atmos brand. Both transactions will be funded with Foot Locker’s available cash.
WSS is an athletic-inspired retailer with 93 off-mall locations in California, Texas, Arizona and Nevada. The company is focused on building deep relationships with Hispanic communities and derives approximately 80% of its sales from loyalty program members.
“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,” said Richard A. Johnson, Chairman and CEO of Foot Locker 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.”
The atmos acquisition was made to expand Foot Locker’s international presence, particularly in Japan, where the brand operates 39 of its 49 locations. atmos offers premium sneakers and apparel, including an exclusive in-house label and collaborative partnerships with sneaker vendors as well as experiential stores and an omnichannel platform. The retailer makes more than 60% of its earnings, which totaled $175 million in 2020, through 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,” said Johnson. “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. We are thrilled to bring atmos into our portfolio of brands and build on the strong foundation of this differentiated business.”
The acquisitions also will help Foot Locker expand its physical store base, which took a hit due to lockdowns in 2020. The retailer is shuttering more than 250 Footaction stores, representing two-thirds of the banner’s footprint, as it phases out the brand. The remaining stores will be transitioned to the Foot Locker, Champs Sports, Eastbay and Sidestep portfolios, which total 2,952 stores in 27 countries.