Foot Locker is buying two sneaker-related companies, but investors might want more details about the purchase. WSJheard explains. WSJWhatsNow
Sneakerheads have a reputation for bidding prices up. Unfortunately for Foot Locker , that wasn’t the case for its shares when the companyFoot Locker said it is buying WSS, a Los Angeles-based athletic retailer, and atmos, a Japan-based streetwear and sneaker seller, for $1.1 billion in total. The company paid for the separate transactions with cash, which represents about half of its cash balance as of last quarter.
Given Foot Locker’s heavy exposure to mall-based stores, some diversification seems to be prudent. The pandemic showed the wisdom of diversifying from traditional selling channels. WSS’ store fleet is entirely off-mall and concentrated along the West Coast, an area where Foot Locker has less of a presence, and atmos brings e-commerce exposure. While Foot Locker derived roughly one-quarter of its sales online last quarter, atmos generated more than 60% of its sales digitally last year.
It helps that the two retailers serve different ends of the price spectrum. WSS sells cheaper products and caters to families; atmos is known for premium products and collaborations with popular brands such as Nike , Vans and Adidas. The exposure to two very different pricing tiers could be a helpful hedge against weak consumer sentiment on either end of the income spectrum.
That said, the deal didn’t come cheap. For WSS, Foot Locker paid roughly 1.8 times the retailer’s 2020 revenue, while for atmos it paid 2.1 times on the same basis. The purchase price for atmos actually could rise, depending on its revenue and earnings performance. Those are hefty premiums compared with Foot Locker, which itself trades at roughly 0.8 times by the same measure. To justify the price, Foot Locker will have to prove that the newly acquired companies have a better growth trajectory.
México Últimas Noticias, México Titulares
Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.
Gigi Hadid's Summer Sneakers Are Legit Just $60 and You'll Wear Them EverywhereThey literally go with everything, so.
Leer más »
WSJ News Exclusive | Wolverine to Buy Sweaty Betty for $410 MillionThe maker of Wolverine boots and Keds, Saucony and Merrell sneakers is diving deeper into apparel with the acquisition of women’s activewear brand Sweaty Betty.
Leer más »
Two baby pandas born at France's Beauval zooTwo baby pandas have been born at the Beauval zoo in France, said the zoo on Monday, adding that the newly born animals were in good health.
Leer más »
Old Fashioned RecipeThe invention of the drink is frequently (and probably inaccurately) credited to a bartender at the Pendennis Club, in Louisville, Kentucky, who around the turn of the 20th century reportedly made the drink for Colonel James E. Pepper, a member of the club and by some accounts a prominent bourbon distiller.
Leer más »
Hoda reveals the good-luck charm she brought to gymnastics beam finalThe TODAY co-anchor had something special with her on hand as she cheered on Team USA.
Leer más »