UK retailer JD Sports is accelerating its push into the US with the $495m acquisition of DTLR Villa, a Baltimore-based sportswear company.
The deal comes weeks after JD acquired California-based Shoe Palace, and will expand its interests in the north and east of the US.
The purchase is the latest in the transatlantic expansion by JD, which acquired Finish Line of Indianapolis in 2018. The company opened its first five US stores under the JD brand the same year and a flagship outlet in New York’s Times Square followed in 2020.
JD has coped better than most retailers as a crisis, compounded by coronavirus, has spread across the British high street. The sportswear group has held up thanks in part to the popularity of comfortable leisurewear as lockdowns have kept people at home.
“The US is the largest athleisure market in the world — if you want to be taken seriously you have to have a presence there,” said Kate Calvert, analyst at Investec.
JD, which also has a presence in Europe, is becoming an important partner to brands such as Nike and Adidas, as they try to reach customers that will not shop with them directly.
“JD is now top tier as far as the brands are concerned,” Ms Calvert said, adding that the company’s mix of footwear and clothing fits with both Nike and Adidas, which are keen to expand their clothing businesses.
DTLR Villa was founded in 1982, one year after JD launched in Bury, Greater Manchester.
Originally known as Downtown Locker Room, the Baltimore company merged with Sneaker Villa of Philadelphia in 2017. Today it operates almost 250 stores across 19 states.
Glenn Gaynor and Scott Collins will continue as co-chief executives of the US company, which last year produced earnings before interest, taxes, depreciation and amortisation of $45.6m.
Peter Cowgill, JD’s executive chairman, said the company planned to keep DTLR’s branding.
“This is another exciting milestone in the group’s development in the US,” he said. “Like Shoe Palace, DTLR pride themselves on the deep connection they have with their consumers and the active role they play in the communities that they serve.”
JD, which joined the FTSE 100 in 2019, in January upgraded its full-year profit expectations to “at least £400m”, after like-for-like sales in the 22 weeks to January 2 rose 5 per cent year on year.
The acquisition will add to the UK company’s roster of more than 2,600 stores, 830 of them under the JD Sports brand. JD said it would fund the all-cash purchase through existing liquidity and bank facilities.