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27 Mar, 2018

Race to Become a Global Player

Race to Become a Global Player

On Monday, news broke that U. K.-based JD Sports Fashion had agreed to buy U. S. sportswear retailer Finish Line Inc. in a deal worth $558 million in cash. In response to the acquisition, some analysts on the Street see athletic apparel and sneaker companies Nike Inc., Adidas AG and Under Armour Inc. benefiting, while warning that it may pose as a significant competitive threat to Foot Locker Inc.

JD Sports, which overtook Sports Direct as Britain’s leading sportswear retailer by market capitalization, is looking to push into the high-value U. S. market as demand for branded sports shoes and clothes has given the chain an advantage against its competitors. A move into the world’s largest sportswear market is the company’s boldest yet, and should increase its importance to international brands such as Nike and revived German company Adidas.

Finish Line sells premium athletic footwear, apparel and accessories across 950 branded retail stores in U. S. malls and shops inside Macy’s Inc. department stores, as well as online. As a highly promotional and competitive retail space has cut prices for athletic gear down in the recent period, brands like Nike could see an improvement with JD in the U. S. market.

With JD working to improve operations at Finish Line, Foot Locker will head off against a sharpened global competitor in its home market. While in the short term, Foot Locker may still get a boost as JD intends to shut down Finish Line’s underperforming stores, a strengthened company with better access to high-end products could be a serious long-term threat to the New York City-based retailer. Note that JD also indicated plans to open a number of JD branded stores in the U. S. and to accelerate reimagine of the Finish Line store fleet, both of which may be competitive threats for FL

Some information about 2018 trade fairs: Top International Footwear Trade Shows, Top International Golf Trade Shows, Top International Sport and Wellness Trade Shows to Attend in 2018

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