Neil Saunders’ Post

JD Sports has just announced its acquisition of Hibbett Sports, subject to regulatory approval. With $4.1B in sales, JD Sports will more than double its retail locations in the US sports retail market. However, the company still has some catching up to do with Dick's Sporting Goods and Foot Locker. The $1.1B acquisition is a bold move, and JD has its work cut out for itself to improve product margins and achieve ROI. It will be interesting to watch how the company navigates product pricing moves and potential supply chain synergies gained. #JDSports #HibbettSports #SportsRetail #Acquisition #BusinessGrowth

The sporting goods and apparel giant Amer Sports has just taken a step toward an IPO this year, aligning with expectations that anticipated interest rate reductions in 2024 might breathe new life into the IPO landscape.   Established in Finland in 1950, Amer Sports boasts a brand portfolio that includes Arc’teryx, Salomon, and Wilson. After its listing on Nasdaq Helsinki in 1977, the company went private in 2019 under the leadership of a consortium led by ANTA Sports, China’s foremost sporting goods entity. Key co-owners encompass Anamered Investments, Chip Wilson's investment outfit, FountainVest Partners, and Tencent.   Since it transitioned to private ownership, Amer has exhibited robust growth, boasting a compound annual rate of 20%. In 2022 alone, it recorded sales exceeding $3.5 billion, as per Securities and Exchange Commission filings. This recent IPO filing has sparked optimism among investors anticipating a potential upswing in the IPO landscape this year.   The IPO market hit a standstill in 2022, with 149 listings that raised around $21 billion—a stark contrast to the $282 billion amassed in 908 IPOs the previous year. 2023 didn't fare much better, with 108 IPOs, generating $19.4 billion according to Renaissance Capital.   However, the tide began to turn towards the end of the year when chip designer Arm (ARM) successfully raised nearly $5 billion in the most substantial U.S. IPO since 2021. Arm's September debut paved the way for others, including grocery delivery firm Instacart (CART) and renowned sandal maker Birkenstock (BIRK).   I’m excited to see what the year holds for the IPO landscape.   https://lnkd.in/dthfJdAw   #ipo #business #amersports #capitalmarkets #wallstreet 

"JD Sports is on a fast track and acquiring an existing player like Hibbett is a good way to accelerate growth," says Mark Ryski, Author, CEO & Founder of HeadCount Corporation. "Given that Hibbett is especially strong in smaller, southeastern markets, this acquisition will provide JD Sports with market coverage in geographies that would be challenging to grow organically. Additionally, leveraging Hibbett’s e-commerce strengths more broadly is also part of the value in acquiring the chain. Based on these facts, the acquisition makes good sense. However, JD Sports recent results have been below expectations, and just adding more stores alone won’t satisfy shareholders unless same-store sales and profits also improve." Check out more insights from one of the retail industry’s leading experts - https://buff.ly/3qRfPx2. More great comments on this topic by RetailWire's BrainTrust experts including: Neil Saunders, Richard Hernandez, Jeff Sward, Brandon Rael, and Mohammad Ahsen (Socially Ahsen).

🔥 | Fireside chat w/Joe Preston, CEO of New Balance. In 1972, the brand - that was founded in 1906 - was purchased by Jim Davids. Only doing $100k/year in sales. Keeping manufacturing domestic was an essential ingredient (even when brands were going offshore). #MadeInUSA In 1995, New Balance took a chance with Joe. When all the other brands had required industry experience. They saw his experience in consumer as a valuable foundation. 12'is years ago, NB made the choice to support baseball because the barrier to entry was lower than basketball, football and other sports. Kudos to Dustin Pedroia for being the 1st domino in scaling the business to north $25 million. Today, innovation continues to be at the heart of what they do. What started in running has leaked into other sports as consumers demand brands to enhance their performance. Teams are organized around sport + lifestyle. They will continue to have some select brands around specific sports. Warrior Sports will play off the same playbook as they own Hockey & Lacrosse. Fueling meaningful growth. Moving forward, they will make strategic partnerships with other mainstream sports --> deal w/Fenway Sports Management (FSM) & Liverpool Football Club has helped them enter into soccer. And they will continue to go back to their roots - 1st NBA Players was James Worthy - in basketball. Capital investments in and around the sport will continue. For example, The TRACK at new balance has been a tremendous catalyst for helping their athletes and creating a space for value creation. #Retail stores will continue to be a priority. Not just wholesale stores. As they expand (more) internationally they will add to their 650 stores... opening 90 a year + expanding the licensee of 2-3,000 stores. #Apparel became important internationally as they started to build mono-brand stores that help create demand across multiple seasons. Although it's $1.2 billion today, they see more growth w/in the space that is roughly 40% of revenue today. Brands to keep an eye on are those connecting through community, sport & innovation. Consensus #HotSeat #VC #PE #Consumer #ConsumerBrands #AlwaysLearning

Shares for Academy Sports + Outdoors dipped nearly 8 percent in Thursday morning trading after the company issued soft guidance for the year following a miss in net sales for fiscal 2023. For the full year, net sales at the Katy, Texas-based retailer fell 3.7 percent to $6.16 billion, down from $6.40 billion in 2022. Net income for fiscal 2023 was $519.2 million, down 17.3 percent from $628 million the year prior. In the fourth quarter, however, Academy made some gains with net sales in the period up 2.8 percent to $1.79 billion, up from $1.75 billion in Q4 2022. Net income in the quarter was $168.2 million, up 6.7 percent from $157.7 million the same time last year.

📈 Retail M&A Spotlight: KKR to Acquire Varsity Brands from Bain Capital for $4.75 Billion📈 In recent years, the sports sector has become a favored target for private equity investments. This trend encompasses various aspects such as team ownership (e.g. Arctos Sports Partners investing into the Sacramento Kings and the Golden State Warriors) and brand and licensing ventures in sporting merchandise and gaming (e.g. Fanatics). Recently, Varsity Brands, a leading provider of sports uniforms for students, announced its acquisition by KKR from Bain Capital for $4.75 billion. Varsity Brands comprises two main businesses: ➡️BSN Sports: Distributes customizable team sports equipment and apparel through partnership brands, including Nike and Under Armour. ➡️Varsity Spirit: Sells cheerleader uniforms and apparel, and hosts educational camps, clinics, and competitions. With an EBITDA of approximately US$400 million, the transaction implies a 12x EBITDA multiple. Notably, this acquisition follows Bain Capital's previous ownership, indicating potential for further growth under KKR’s management to achieve their return targets. 🔗For more: https://lnkd.in/g79vbiGX #MergersAndAcquisitions #VarsityBrands #KKR #BainCapital #SportsApparel #Investment #BusinessNews

It's #𝗠𝗲𝗿𝗴𝗲𝗿𝘀𝗮𝗻𝗱𝗔𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻𝘀 𝗠𝗼𝗻𝗱𝗮𝘆... ...We often talk about the impact of an acquisition on the employees of the acquired company. 𝙒𝙝𝙖𝙩 𝙝𝙖𝙥𝙥𝙚𝙣𝙨 𝙩𝙤 𝙩𝙝𝙚 #𝙘𝙪𝙨𝙩𝙤𝙢𝙚𝙧𝙨 𝙬𝙝𝙚𝙣 𝙖 𝙢𝙚𝙧𝙜𝙚𝙧 𝙤𝙧 𝙖𝙣 𝙖𝙘𝙦𝙪𝙞𝙨𝙞𝙩𝙞𝙤𝙣 𝙝𝙖𝙥𝙥𝙚𝙣𝙨? Very often a buyer/PE firm will make a strategic decision that negatively impacts the consumer as well as competitors. Back in 2023, 3 years after it acquired 𝗠𝗶𝗿𝗿𝗼𝗿, 𝘁𝗵𝗲 𝗵𝗼𝗺𝗲 𝗳𝗶𝘁𝗻𝗲𝘀𝘀 𝗱𝗲𝘃𝗶𝗰𝗲, lululemon Studio discontinued it and was looking for a buyer. Why did it change it's strategy? "The home fitness business has been a drag on Lululemon’s performance." CEO Calvin McDonald said in March that sales of the home fitness equipment disappointed." (link to article in 1st comment) How did I learn about this? My cousin, who loved her Mirror, especially since she had her baby and couldn't readily go to the gym to get back in shape, told me how disappointed she was. Did Lululemon give their Mirror customers any warning? Nope. What happened since was Mirror was discontinued? A competitor, Tonal, stepped in, gave customers a trade in offer. But my cousin didn't take them up on it. She found another solution. When a client of mine, a public accounting firm with 400 partners, acquired a smaller firm, did they inform and educate the partners how to tell their clients about the fee increases now that they had new owners? Nope. Clients were scattered, lost, and frustrated. Every partner was on his or her own to tell the fee increase story. Integration and change management doesn't just affect the internal players. It affects entire customer bases that took years to build trust and brand awareness with. This trust and brand loyalty can evaporate in a flash, and the cost to rebuild enormous. While difficult strategic decisions must be made, much consumer retention and value could be generated by a little insight beyond the straight numbers. If Lululemon wanted out of the Mirror hardware business, they could have taken wiser steps to retain the loyalty of these customers. It's also interesting to note that Lululemon bought Mirror for $500 million and despite all the due diligence, learned later that their due diligence hadn't revealed certain weak spots in the business. These weaknesses showed up within the first year of ownership. Efforts to shore them up were fruitless. The lessons here? 1. Even the best due diligence is not a perfect science. There will be surprises, sometimes unpleasant ones. 2. M&A affects not only the employees and leadership but valuable customers. Once burned, they're hard to regain. #VistageLosAngeles #Privateequity

Have you heard of the incredible growth story of Franklin Sports? For years, they've managed to keep up with dramatic changes in demand and consistently bring exciting new product lines to the market. Take pickleball, for example. It has been the fastest-growing sport in America for 3 years and Franklin Sports was there, riding the wave. This achievement would not be possible without significant improvement to their supply chain. Read how they managed to enhance it by bringing in industry veterans and applying robust forecasting methodologies with GAINS. #SupplyChainPlanning #SupplyChainOptimization #innovation

Have you heard of the incredible growth story of Franklin Sports? For years, they've managed to keep up with dramatic changes in demand and consistently bring exciting new product lines to the market. Take pickleball, for example. It has been the fastest-growing sport in America for 3 years and Franklin Sports was there, riding the wave. This achievement would not be possible without significant improvement to their supply chain. Read how they managed to enhance it by bringing in industry veterans and applying robust forecasting methodologies with GAINS. #SupplyChainPlanning #SupplyChainOptimization #innovation

What's New to TheStreet... 👟 JD Sports Fashion Sees Sales & Profit Surge from U.S. Expansion 💥 U.K. sneaker and fashion giant JD Sports is reaping the rewards of its U.S. expansion, posting impressive revenue of $6.7 billion for the period. With a boost in sales and adjusted profit, JD is making waves in the global fashion scene! 🌍📈 How do you feel about JD Sports’ growing presence in the U.S.? Share your thoughts below!👇🏻✨ 👉🏻Follow New To The Street for more! #jdsports #fashionretail #usexpansion #sneakerculture #globalfashion #businessgrowth #retailnews #businessupdate #innovation #businessnews #business #news #newtothestreet