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Slumping athletic apparel retailer Finish Line agreed to sell itself to a United Kingdom-based sportswear company that was angling to get a foothold in the U.S.
JD Sports Fashion has reached a deal to acquire Indianapolis-based Finish Line for about $558 million.
Finish Line has 556 stores, as well as dedicated, branded floor space in 375 Macy’s locations. The company, which also sells products in another 188 Macy’s stores, has about 13,000 employees.
The company has been struggling amid declining mall foot traffic. Sales at stores open at least a year tumbled 7.9% in the company’s fourth quarter, Finish Line said Monday.
The environment was “more challenging than we expected,” CEO Sam Sato said in a statement.
JD Sports Fashion negotiated the deal with plans to combine the two companies into “a leading global, premium, multichannel retailer of sports, fashion and outdoor brands who embraces the latest online and in-store digital technology,” Finish Line said in a statement.
The U.K. company had been seeking an expansion opportunity in the U.S.
The deal appears to have other competitive motivations, as well. Reuters reported that JD Sports Fashion rival Sports Direct International had a significant stake in Finish Line.
Indeed, analysts had predicted a sale to Sports Direct International.
The deal calls for JD Sports Fashion to pay $13.50 per share for Finish Line.
Finish Line stock jumped 28.6% to $13.57 in pre-market trading.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
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