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 2019, Shoe Palace generated revenues of $435 million. Shoe Palace is operated by four brothers from the Mersho family who head up the various operating functions across the business.
Total cash consideration for the acquisition of Shoe Palace, subject to customary cash/debt and working capital adjustments, is $325 million, of which $100 million has been deferred and will be paid on various dates over the next 12 months, JD Sports said in a press release.
In addition, the Mersho Brothers have also been issued with equity in Genesis such that they will own 20 per cent of the enlarged group in the United States. The initial fair value of this equity consideration is approximately $356 million.
The acquisition will significantly increase the JD Sports group’s presence on the US west coast and strengthen its connection with the Hispanic and Latino consumers, who represent a significant proportion of Shoe Palace’s customer base.
The 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 as we look to create an unrivalled proposition which connects with all relevant consumers.