JD Sports signs $1.1 billion deal to expand in US

Retailer completes largest acquisition to date by purchasing Alabama-based chain

JD Sports has reversed the trend where UK companies are falling victim to American buyers. They have struck a $1.1bn deal (£900m), to buy a US sportswear retailer.

The trainers’ group has acquired the Alabama-based Hibbetts chain, which sells basketball shoes by Nike and Adidas as well as other sneakers.

The deal represents JD’s largest ever takeover and accelerates its rapid entry into the US market. JD was founded in Bury in Manchester in 1981.

JD will be paying $87.50 for each share. This is a premium of 20pc over Hibbet’s share price. JD shares increased 6pc to reach 124p, but remain bruised following a profit warning in January that took them down from 170p.

Regis Schultz is the French businessman that leads JD. He said: “Hibbett’s footprint is highly complementary, adding a strong presence in communities throughout the south-eastern US where we have a current limited presence.” This will also give a better platform for the JD fascia to be rolled out in the US.

JD’s US acquisition bucks the trend of American investors flocking to UK stock exchanges for deals. This year, American companies have acquired British listed companies, such as GXO Logistics, which bought Wincanton and International Paper, which purchased DS Smith.

Hibbett’s stock is traded on the New York Stock Exchange.

JD will now own 2,100 US sportswear shops, thanks to the Hibbett collection. This includes more than 1,000 stores. JD’s share of US sales is also set to increase from 32pc up to 40%.

The US sportswear market is worth $120 billion. In comparison, the UK’s market is worth only $10bn.

Hibbett’s stores are mostly found in America’s shopping malls, but it also has a strong following in the small and medium-sized cities of the US South.

Mike Longo said that the deal was “true testimony” to the Hibbett staff, who helped build the company.

He said that JD Sports was “committed” to the communities it serves and its customers.

After the transaction is completed, Mr. Longo and his management team will continue to run the group.

Hibbett’s average customer is 24 years old, which is the same as the average JD client. Both companies carry similar brands like Nike and Adidas.

JD got a $1bn loan extension from its bank to pay for this deal.

Recently, the UK chain has expanded rapidly abroad. Earlier this month it opened a global flagship on the Champs Elysees in Paris.