Dick’s Sporting Goods is acquiring Foot Locker for approximately $2.4 billion, marking the second major footwear company buyout in the past two weeks amid ongoing concerns over U.S. President Donald Trump’s tariffs. Dick’s announced on Thursday that it plans to operate Foot Locker as a separate entity, maintaining its brand names, including Kids Foot Locker, Champs Sports, WSS, and the Japanese sneaker brand atmos.
CEO Lauren Hobart of Dick’s expressed optimism about the acquisition, stating that it would create a new global platform to meet the evolving needs of consumers. This would be achieved through iconic retail concepts, updated store designs, omnichannel experiences, and a diverse product range catering to various customer groups.
Both Dick’s and Foot Locker are led by women—Lauren Hobart became CEO of Dick’s in 2021, and Mary Dillon has been Foot Locker’s CEO since 2022.
Earlier this month, Skechers also announced it was being acquired by investment firm 3G Capital in a deal valued at over $9 billion.
The retail industry, particularly footwear companies, has been deeply impacted by President Trump’s trade war, especially with China, as many athletic shoe manufacturers have significant production operations in Asia. Shares in sporting goods and athletic footwear companies have been under pressure this year, with Foot Locker’s stock plummeting by 41%. The company is also facing challenges from major brands like Nike and Adidas, which have shifted their sales strategies. Skechers, for instance, has dropped nearly 8% this year.
Around 97% of the clothing and footwear sold in the U.S. is imported, primarily from Asia, according to the American Apparel & Footwear Association. While this overseas manufacturing has kept labor costs down, the ongoing trade tensions and new tariffs could drive up prices, with suppliers unlikely to absorb the cost increases.
For Dick’s, the acquisition of Foot Locker presents a significant opportunity. Foot Locker’s extensive global footprint, which includes approximately 2,400 stores across 20 countries, would give Dick’s its first international presence. Foot Locker’s global sales reached $8 billion last year, with about 33% of its revenue coming from markets outside the U.S. Analysts project that the combined company could generate around 12% of its sales internationally on a pro forma basis.
The acquisition also expands Dick’s customer base, especially among sneaker enthusiasts who eagerly await new releases from Foot Locker. Neil Saunders, managing director at GlobalData, noted that the deal would immediately boost Dick’s, giving it greater bargaining power with national brands, particularly in the sneaker market.
Foot Locker’s shareholders have the option to receive either $24 in cash or 0.1168 shares of Dick’s common stock for each Foot Locker share they own. The deal is expected to close in the second half of the year, pending approval from Foot Locker’s shareholders. Following the announcement, Dick’s stock saw a drop of over 13%, while Foot Locker’s shares surged more than 82%.
