Foot Locker Broadens Market on West Coast With Acquisition of WSS
Foot Locker, Inc., the New York–based specialty-athletic retailer, has entered into a definitive agreement to acquire Eurostar, Inc., or WSS, for $750 million. The transaction will be funded with Foot Locker’s available cash.
WSS, an athletic-footwear and -apparel retailer headquartered on the West Coast, focuses on the Hispanic consumer demographic in California, Texas, Arizona and Nevada, where the company operates 93 off-mall stores. The company also heavily relies on ties with its customers to generate revenue, with approximately 80 percent of sales coming from its loyalty program.
WSS generated approximately $425 million in revenue during the 2020 fiscal year and had a three-year revenue CAGR of approximately 15 percent. The acquisition is expected to grow Foot Locker’s earnings per share this year.
“WSS has built a successful, high-growth business by pioneering the neighborhood-based-store model, built on community engagement and a full-family offering,” said Foot Locker Chairman and Chief Executive Officer Richard A. Johnson. “This acquisition enhances our product mix and provides access to a customer base and store footprint that are both differentiated from and complementary to our current portfolio. We are thrilled to welcome WSS’s customers into the Foot Locker family as well as join forces with their talented team. Looking ahead, we see significant opportunities to expand this business, including by accelerating WSS’s store growth into new geographies in North America.”
Foot Locker is expected to diversify its store and customer footprint through WSS’s differentiated market position, complementary customer base and real-estate portfolio. The acquisition will also allow the company to serve different customers and offer various price points across its products.
“Since WSS’s inception 37 years ago, we have focused on meeting the needs of underserved communities while elevating our neighborhoods, one step at a time,” said WSS founder and Executive Chairman Eric Alon. “Through our WSS Cares! initiative and the support of Foot Locker, our mission to positively impact the communities we serve will continue. We are extremely proud to be a part of Foot Locker as they share our commitment to community.”
Similarly, Foot Locker also recently agreed to acquire Text Trading Company, K.K., or atmos, which owns and licenses the atmos brand, a digitally led, premium global brand, for $360 million. As with the WSS transaction, the acquisition will be funded by cash.