JD Sports Fashion Plc has announced that its existing wholly-owned intermediate holding company in the United States, Genesis Holdings Inc has acquired 100 percent of both the issued shares in the Shoe Palace Corporation and the members’ interests in Nice Kicks LLC. The company said in a statement that total cash consideration for the acquisition of Shoe Palace is 325 million dollars, of which 100 million dollars has been deferred and will be paid on various dates over the next 12 months. In addition, the Mersho Brothers will own 20 percent of the enlarged group in the United States.
Commenting on the development, Peter Cowgill, Executive Chairman of JD Sports Fashion Plc, said: ‘’We are delighted to have completed the acquisition of Shoe Palace. 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.”
Mersho Brother to manage Shoe Palace business
Based in San Jose, California, the company added, Shoe Palace was established in 1993 by the Mersho family and currently has 167 stores, the vast majority of which trade under the Shoe Palace banner. More than half of the stores are located in California, although there is also an established retail presence in Texas, Nevada, Arizona, Florida, Colorado, New Mexico and Hawaii, with the store network supported by a developing ecommerce platform. In the year to December 31, 2019, Shoe Palace generated revenues of 435 million dollars and a profit before tax of 52 million dollars.
“We could not imagine a better way to continue to build on the legacy of our family business. Through this combination with JD and Finish Line in the US, we have gained a strong global partner,” added George Mersho, CEO of Shoe Palace.
The company added that Mersho Brothers will continue to manage the Shoe Palace business although the intention is that, from next year, the JD Finish Line and Shoe Palace teams will begin to share ideas and best practices.
The acquisition of Shoe Palace complements the Group’s ongoing positive developments from the existing Finish Line and JD fascias in the United States, which includes the recent opening of JD’s flagship store in Times Square, New York. In particular, this acquisition will increase the Group’s presence on the West Coast of the United States and strengthen its connection with the Hispanic and Latino consumers, who represent a significant proportion of Shoe Palace’s customer base.