Dick’s to buy Foot Locker for $2.4 billion
Dick’s Sporting Goods is acquiring rival Foot Locker in a $2.4 billion deal, signaling a bold move to expand its global footprint and solidify its role in the evolving retail landscape — even as trade tariffs and shifting consumer behavior introduce new risks.
Announced Thursday, the acquisition will mark Dick’s first entry into international markets. The company plans to operate Foot Locker’s 2,400 stores across 22 countries as a standalone brand, maintaining key banners like Foot Locker, Champs Sports, and Kids Foot Locker. While the deal promises scale and reach, it also exposes Dick’s to significant challenges — from declining mall traffic to volatile trade policies under President Donald Trump’s administration.
Strategic Bet on a Struggling Icon
Foot Locker has spent the past two years trying to reinvent itself to appeal to younger and more diverse shoppers, but the turnaround has yet to gain traction. The retailer’s fourth-quarter sales were down 5.8% year-over-year, and it continues to struggle with softening Nike sales, even as Nike remains its largest brand partner.
Foot Locker’s store count has also shrunk, from roughly 3,000 locations in 2023 to around 2,400 today, with closures focused on underperforming mall outlets. Despite those headwinds, the acquisition reflects Dick’s belief in the enduring strength of the Foot Locker brand.
“We believe there is meaningful opportunity for growth ahead,” said Ed Stack, Executive Chairman of Dick’s. “By applying our operational expertise to this iconic business, we see a clear path to further unlocking growth and enhancing Foot Locker’s position in the industry.”
Mixed Reaction from Investors
Investors weren’t sold on the vision. Shares of Dick’s dropped 13% in premarket trading following the announcement, while Foot Locker stock surged 80% — fueled in part by the 66% premium being offered to shareholders in the buyout.
Analysts are cautious. Neil Saunders, Managing Director at GlobalData, noted that while the merger gives Dick’s access to new retail environments and customer segments, particularly in urban and mall-based locations, it could also face regulatory hurdles due to Dick’s strong domestic market share.
Tariffs Cast a Long Shadow
The merger also comes amid a backdrop of renewed tariff threats under former President Trump’s trade agenda. Roughly 99% of shoes sold in the U.S. are imported, making footwear retailers especially vulnerable to disruptions in global supply chains. The Footwear Distributors and Retailers of America warn that new tariffs could sharply increase costs for retailers and consumers alike.
For Dick’s, the acquisition is both a strategic growth play and a hedge against a rapidly changing retail landscape. The company is betting that its scale, logistics capabilities, and operational discipline can turn Foot Locker into a stronger global player — even as market conditions grow more uncertain.
Whether that gamble pays off remains to be seen, but one thing is clear: the battle for sneaker supremacy just got a lot more intense.
