By Dhirendra Tripathi
Investing.com – Foot Locker (NYSE:) stock was trading 0.5% lower as the company announced the acquisition of two smaller retailers for a combined $1.1 billion.
It is buying athletic retailer WSS for $750 million and Japan’s Atmos for $360 million. The Wall Street Journal first reported the news.
The stock traded higher with 0.5% gains for a while thereafter before giving up the gains.
The acquisitions are part of the company’s game-plan to move out of high-rental malls, a shift accelerated by the pandemic, which has hastened the growth of online commerce.
With the acquisition of WSS, that primarily operates on the West Coast, Foot Locker also gets to cater to the rapidly growing Hispanic consumer demographic.
WSS operates 93 off-mall stores and its community-driven business benefits from deep relationships with customers. Approximately 80% of its sales come from customers who are members of its loyalty program. WSS generated approximately $425 million in 2020.
Atmos is famous for its streetwear and fueling sneaker culture. Atmos has 39 stores in Japan and 10 elsewhere. Of its $175 million revenue in 2020, more than 60% was generated through digital channels.
Both the transactions are expected to close in the third quarter and will be funded with cash.
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