Dick’s Sporting Goods Makes $2.4 Billion Bet on Foot Locker
In a move that is set to shake up the sneaker industry, Dick’s Sporting Goods has acquired Foot Locker in a deal worth $2.4 billion. The acquisition brings together two major players in the retail industry, with Dick’s Sporting Goods, a leading retailer of sporting goods, and Foot Locker, a prominent sneaker retailer with nearly $8 billion in annual sales.
According to a report by Business of Fashion, the deal is expected to have far-reaching implications for the sneaker industry, with analysts predicting that the combined entity could create a new sneaker powerhouse. "The hope is that if [Dick’s Sporting Goods] can replicate their success within the preeminent sneaker retailer in North America, you’ll create a better marketplace for the industry overall," said Tom Nikic, an analyst at Needham & Company, as quoted in the Business of Fashion report.
Foot Locker has faced challenges in recent years, having closed over 20 percent of its stores globally since 2019. The company has struggled to compete with influential boutiques like Kith and has seen a decline in sales as Nike and Adidas have prioritized sales through their own channels. However, according to Business of Fashion, Foot Locker remains a prominent force in the sneaker industry, with a strong presence in sneaker culture and a network of locations at malls across the US.
Dick’s Sporting Goods, on the other hand, has a thriving business in sporting goods, with a network of successful brick-and-mortar locations and ambitions to be a bigger player in the sneaker world. Analysts believe that the companies could better work with suppliers to ensure that all the footwear retailers under their umbrella, including Foot Locker subsidiaries such as Champs Sports, are not only operationally sound but also offer well-rounded assortments focused more on new and compelling products rather than discounted sneakers.
The deal is expected to pose a threat to direct rivals such as JD Sports, which has emerged as a major competitor to Foot Locker in the US. JD Sports, a UK chain in the midst of a US expansion, reported a drop in first-quarter sales and warned that US President Donald Trump’s tariffs could dampen demand. According to Business of Fashion, the company’s US-based sporting goods retailer Hibbett, which was acquired in 2024, and its American sneaker retailers Finish Line, DTLR, and Shoe Palace, will face tough competition from the combined entity.
However, not all companies in the wider sneaker world will be impacted equally. Brands have their own stake in the future of Dick’s and Foot Locker, with Nike standing to win or lose more than most, given that last year it accounted for 59 percent of the total merchandise Foot Locker bought. "If Nike can get back to where it has been in the past demand-wise, then everybody will eat," said Lois Sakany, director of retail at research firm BWG Global, as quoted in the Business of Fashion report.
The deal could also see Adidas and Puma face their own dynamics. In the short-term, Adidas probably won’t see much impact given its momentum, but in the long-term it could face more difficulty increasing its shelf space at Foot Locker given Dick’s strong relationships with a number of brands. Puma’s smaller size and current weakness in the US, meanwhile, mean it could be among those that lose space to others.
One brand that could see its assortment increase is Swiss running brand On. It has a strong relationship with Dick’s but a smaller business at Foot Locker. According to a recent note from investment bank William Blair, cited in Business of Fashion, the deal could help On expand its presence at the sneaker retailer and "unlock a younger male demographic in the US where it is underpenetrated relative to the balance of the globe."
In order for Dick’s and Foot Locker to shake up the sneaker industry, they first need to stabilise Foot Locker, which has lost a step over the past several years. Foot Locker has actively sought to remedy such pain points since unveiling its "Lace Up" turnaround strategy in 2023. According to Business of Fashion, Dick’s has a good deal to offer Foot Locker on these points, with a more technologically advanced online business and a stronger loyalty program.
Ultimately, the success of the deal will depend on Dick’s ability to translate its acumen to Foot Locker, which serves a lower-income customer looking for stylish sneakers and apparel rather than sporting goods or performance-focused footwear. As Sakany noted, "These are the turbulent waters that Dick’s is choosing to enter."
As reported by Business of Fashion, the acquisition is a bold move by Dick’s Sporting Goods, and one that could have far-reaching implications for the sneaker industry. With the combined entity poised to create a new sneaker powerhouse, all eyes will be on Dick’s and Foot Locker as they navigate the challenges and opportunities ahead.
