The British are coming! (To buy sneakers.)
You'd be hard-pressed to find a regular shopper in America who hasn't been inside a Finish Line store at some point, whether it was just to kill time at the mall or to pick up the latest, freshest basketball sneaker on the market. But selling regular sneakers to regular people has become increasingly difficult in recent years—and it's ironically the popularity of sneakers that could be to blame. In today's world, younger people don't want to buy just sneakers—they want the sneakers, meaning ones that are limited-edition and hard to get. Unsurprisingly, limited-edition hype-bombs aren't exactly great business for a store like Finish Line, with 670 doors across the U.S. But the big sneaker business is getting a little boost thanks to JD Sports, a U.K. sportswear retailer with 527 of its own stores across Europe. Today, Bloomberg reports, JD announced that it has agreed to buy Finish Line for $558 million.
JD Sports has been expanding its reach in recent years, acquiring Go Outdoors—the Bass Pro Shops of the U.K.—back in 2016. But the Finish Line acquisition is a strategic move, too: Sports Direct International, considered a direct competitor to JD Sports, currently has a 9 percent direct stake in Finish Line. So JD managed to snap up a sneaker retailer and defang an opponent. "This is a landmark day for JD and will be transformational for the business. It immediately offers a major presence in the U.S., a clear next step to further increase our global scale," JD Sports' executive chairman, Peter Cowgill, said.
The deal isn't final yet, as both Finish Line's and JD Sports' shareholders have to approve the sale. However, if it's completed, the new company will still be subject to the changing wave of big-box sneaker retail. Like Finish Line, JD Sports carries only some limited-edition shoes like Yeezys—the type of product that continues to drive buzz in the market. So while this merger will help Finish Line's stock price in the short term, as customers, who are looking for unique products and brands like Nike, shift their focus to emphasize a direct-to-consumer model, how successfully JD and Finish Line get sneakers into the hands (and on the feet) of customers will ultimately determine their long-term success.
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