JD Sports acquires Shoe Palace
JD Sports has announced that it has acquired US retail chain Shoe Palace for €325 million.
Based in California, Shoe Palace was established in 1993 by the Mersho family and currently has 167 stores, most of which trade under the Shoe Palace banner. While more than half of the stores are situated in California, the chain also operates shops in Texas, Nevada, Arizona, Florida, Colorado, New Mexico and Hawaii.
In the year to 31 December 2019, Shoe Palace generated revenues of $435 million and a pre-tax profit of €52 million. The business is led by four brothers from the Mersho family who head up the various operating functions across the company.
While the purchase will be funded through JD Sports’ cash resources and existing bank facilities, the Mersho brothers have been issued with equity in JD Sports’ US operation Genesis, which is buying the business. This means they will own 20% of the enlarged group in the US.
The brothers will continue to manage Shoe Palace following the acquisition, although JD Sports said its JD Finish Line and Shoe Palace teams will begin to share ideas and best practices from next year.
Peter Cowgill, executive chairman of JD Sports Fashion, said: ‘’We are delighted to have completed the acquisition of Shoe Palace. The Shoe Palace team are ambitious, have great energy and pride themselves on their consumer connection and we welcome them to the group. We are confident that our combined fascias will provide us with the flexibility and expertise to fulfil our mutual ambition of becoming a prime customer destination for sneakers and lifestyle apparel in the United States.”
