Hibbett has entered an agreement to be acquired by British sports fashion retailer JD Sports Fashion for approximately $1.1 billion.
As part of the deal, the Nasdaq-listed company will join JD Sports’s portfolio of athletic footwear and fashion retail brands and will cease to be a publicly traded firm.
“Today’s announcement is a true testament to all that our Hibbett | City Gear teams have built over the years and reinforces the strength of our brands, our close relationships with our vendor partners, and our team of dedicated colleagues across the country,” said Mike Longo, president and CEO of Hibbett.
“With Hibbett’s highly complementary footprint, this transaction represents a logical next step in our strategic growth plans, further enabling us to meet the dynamic demands of consumers globally,” added Regis Schultz, CEO of JD Sports.
The transaction is expected to close in the second half of this year, subject to stockholder approval, regulatory approvals, and other customary conditions.
According to GlobalData MD Neil Saunders, the deal is part of JD Sports’ ambition to win in the North American market, which follows previous acquisitions of mall staples Finish Line and Shoe Palace, as well as the expansion of its own JD Sports fascia.
“The addition of Hibbett to the JD family will provide a big boost to the US business and give JD Sports a presence in a lot of markets where it is currently underrepresented,” he elaborated.
The acquisition will also give Hibbett a “more defensible future” as competition is heating up with more sales made online and players like Academy Sports + Outdoors looking to expand. The retailer will be able to use JD Sports’ superior buying power to drive up margins and is likely to receive more investment in its stores, the analyst added.
While the merger represents no major challenge to Dick’s, which remains the preeminent retailer of sporting goods, it does increase the competitive temperature in the sports and sneaker market, he concluded.
As of February 3, Hibbett operated 1169 Hibbett, City Gear and Sports Additions specialty stores across 36 states.
