Dick’s Sporting Goods has agreed to buy smaller rival Foot Locker for $2.4 billion, the second major footwear deal this month after the buyout of Skechers, as the retailers navigate choppy demand and global trade uncertainties.
The $24-per-share offer, announced by both companies on Thursday, represents an 86% premium to Foot Locker’s last close and gives Dick’s a stronger foothold in the sneaker industry with over 3,200 stores and an entry into international markets.
The combined company could also benefit from better negotiating power with key vendors such as Nike, Adidas and Puma, at a time when the Trump administration’s steep tariffs threaten to raise supply-chain costs for US retailers and discourage consumer spending.
“Tariffs may be forcing (the companies’) hand to some extent, but this is also a strategic moment to acquire additional scale and strengthen buying power in the footwear market,” said Joel Brock, a partner with global business consulting firm West Monroe.
Shares of Foot Locker surged 85% to $23.78 on Thursday on the news, after losing about 40% in the year so far. Dick’s Sporting Goods fell 14%.
TD Cowen analyst John Kernan said the deal would be a “strategic mistake” for Dick’s as the company will have to increase investments to further scale and fix Foot Locker.
Over the last few years, Foot Locker has lost market share to competition from brands such as Nike and Under Armour, which have expanded their direct-to-consumer business, as well as falling customer visits to indoor malls, where most Foot Locker stores are located.
“A big part of Foot Locker being under pressure was the relationship they had with Nike,” Dick’s Chairman Ed Stack said on a call with analysts, referring to Nike’s move to DTC under ex-CEO John Donahoe.
Nike has now reversed course under new CEO Elliott Hill, leaning back into its relationships with retailers.
Dick’s expects to operate Foot Locker as a standalone business unit within its portfolio and maintain the Foot Locker brands, according to the statement.
Foot Locker operates across 20 countries in markets including North America, Europe and Asia, and logged worldwide sales of $8 billion in 2024.
Last week, Skechers agreed to a $9.42 billion buyout by private equity company 3G, exiting public markets after 26 years as the popular shoe brand grapples with the impact of steep US tariffs.
Dick’s intends to finance the deal, which is expected to close in the second half of 2025, through a combination of cash-on-hand and new debt.
