Dick’s Sporting Goods-Foot Locker: New Sneakers

A fresh set of downs for Foot Locker. After a handful of difficult years during which its market value tumbled as consumer demand faltered, the Manhattan-headquartered sneaker company accepted a takeover bid from Dick’s Sporting Goods in May. The deal created an international giant with some 3,200 stores across 20 countries.

Speaking to CNBC after news of the deal broke, Dick’s executive chairman, Ed Stack, explained the rationale for the takeover: “It gives us a much deeper relationship with the key brands we do business with, Nike, Adidas, On Running, all of them…Footwear is the engine that pulls the train for Dick’s Sporting Goods,” stated Stack, whose company’s footwear inventory as a percentage of total stock has traditionally been less than 20%, against over 80% for Foot Locker.  

That the Foot Locker board accepted Dick’s overtures was not entirely unexpected. Competition from other sneaker retailers like JD Sports, plus the trend toward the bigger sneaker brands, such as Nike, Adidas and New Balance, opening their own stores had eaten into its market share and prestige. Throw in inflation and tariffs and it had become increasingly difficult for Foot Locker to stand on its own two feet.  

Locked out
Perhaps the most severe blow to Foot Locker this past decade, however, was the decision by its biggest supplier to pivot to a direct-to-consumer approach. In 2017, Nike shifted its strategy to prioritizing selling direct to consumers rather than via retail partners, (not unlike a big media & entertainment company launching its own streaming service and debuting new films there, instead of on Netflix). It eventually reversed this decision, but for Foot Locker’s customers ─ many of whom shopped there to get the latest, limited-edition sneakers ─ the damage was done.

In May 2021, the price of Foot Locker stock was $64, but by the following March the company’s value had more than halved. Foot Locker’s share-price remained stubbornly in the mid-$20s for most of 2024, with the stock price dipping below $12 dollars in April 2025.

Perhaps the most intriguing question about the deal is what it says about Dick’s international ambitions

For Foot Locker, the buyout represents another opportunity to revive its flagging fortunes, after a number of initiatives, including an extensive store redesign, failed to move the needle in terms of sales. With the new owners intending to keep Foot Locker as its own business under its own branding, Dick’s inventory flow and e-commerce expertise, not to mention it’s increased bargaining power when it comes to negotiating with suppliers, should shore up Foot Locker’s operations in the short term.

International foothold
Perhaps the most intriguing question about the deal is what it says about Dick’s international ambitions. For a household name in US retail, Dick’s is practically unknown outside of America. But then again, it is a relatively young company.

Dick’s ascent can be traced back to early 80s when Ed Stack and siblings purchased the two Dick’s Sporting Goods outlets from their father Richard ‘Dick’ Stack, located in and around Binghamton in upstate New York ─ where, by coincidence, the founder of the business that one would one day become Foot Locker, George McKinney, spent a decade as a clerk at the Lester Shoe Company at the end of 19th century.

Today, Dick’s has around 800 retail stores ─ all of them in the US. It has been the dominant player in the US sporting goods retail landscape since the collapse of Sports Authority in 2016. In parallel, the past decade has seen the international expansion of French sporting goods retailer Decathlon, including to Canada, where it opened its first store in 2018 and now has 16 outlets nationwide.

Following this acquisition, Dick’s executives will now be able tap into Foot Locker’s retail experience in over two-dozen countries worldwide with a view, perhaps, to launching the Dick’s brand globally in the coming years.

Speaking to Morgan Stanley in November, Stack remarked, “Foot Locker gives us the opportunity to have a global presence, which we don’t have today. It gives us the opportunity to engage with a consumer that we don’t have today. We don’t make investments from one quarter to the next: we make investments for a lifetime.”

Whether or not that means brick-and-mortar Dick’s outside the US is far from black and white at this stage, but with analysts putting Dick’s total addressable international market at about $300 billion post-takeover, they may well feel like taking a shot.