When Dick’s Sporting Goods announced the purchase of Foot Locker for $2.4 billion earlier this month, investors balked at the move. This week, Executive Chairman Edward Stack defended the acquisition in the Dick’s latest earnings call as a “unique opportunity to strengthen our brand relationships through a global presence,” and serve markets that it can’t currently with its largely US-based footprint.
The purchase gives Dick’s an opportunity to compete for market share around the globe rather than cede that ground to other retailers, Stack added. “I think what [Wall Street] needs to understand is that, like it or not, we don’t make investments for a quarter or two,” he said. “We make these decisions and investments for a lifetime.”
The longer-term goals for the acquisition are to create a global sports retail platform and leverage that expanded international presence to strengthen brand partnerships, according to Dick’s.
While Foot Locker did scale back its international business in 2024 with closures in South Korea, Denmark, Norway, and Sweden, the company remains a global player. As of February 1, the sneaker outlet operated 2,410 stores across 26 countries, with just 677 locations in the US. For comparison, all 856 of Dick’s locations are located in the United States.
One thing the newly combined businesses shared is their heavy reliance on a single vendor: Nike, which made up 25% of Dick’s merchandising purchases in 2024, and 59% of Foot Locker’s. Nike notably is in the middle of reprioritizing its wholesale distribution after pulling back on that segment and focusing instead on more direct channels. In May, the brand returned to Amazon after a six-year hiatus, for instance.
Asked by an analyst about whether she thought Nike’s new segmentation would be favorable to Dick’s, CEO Lauren Hobart said, “Nike and all of our brands do a good job segmenting, and we are expecting this will be no different. We expect minimal overlap.”
She also acknowledged that Nike is making “an effort to clean up the marketplace,” which is likely motivating their segmentation strategy.
This report was originally published by Retail Brew.
