Foot Locker has entered into an agreement to acquire Text Trading Company, K.K. (“Atmos”), which owns and licenses the atmos brand, a digitally-led, global retailer headquartered in Japan, for $360 million.
The transaction will be funded with the company’s available cash.
The Atmos brand includes premium sneakers and apparel, an exclusive in-house label, collaborative relationships with leading vendors in the sneaker ecosystem, experiential stores and a robust omni-channel platform. With a base of 49 stores globally, including 39 in Japan, Atmos operates under the Atmos banner and Atmos pink, its women’s brand.
The acquisition of Atmos will accelerate Foot Locker’s global reach with a highly strategic foothold in Japan, the third largest economy globally, while extending the company’s premium and top-tier offerings. The Atmos brand generated approximately $175 million of revenue in its fiscal year 2020, more than 60 percent of which was generated through digital channels. The acquisition is expected to be accretive to Foot Locker’s earnings per share in fiscal year 2021.
“Atmos is uniquely positioned through its innovative retail stores, high digital penetration and distinctive products that have made it a key influencer of youth and sneaker culture,” says Richard A. Johnson, chairman and chief executive officer, Foot Locker. “With Atmos, we are executing against our expansion initiative in the rapidly growing Asia-Pacific market, establishing a critical entry point in Japan and benefitting from immediate scale. We are thrilled to bring Atmos into our portfolio of brands and build on the strong foundation of this differentiated business. We look forward to welcoming Atmos’s highly-respected founder, Hidefumi Hommyo, who is considered one of the most influential people in streetwear and sneaker culture, along with the rest of the valued atmos team and their customers, to the Foot Locker family.”
“Atmos was founded in 2000 as a small retail store in the back streets of Ura-Harajuku,” says Hidefumi Hommyo, founder, Atmos. “Our passion for sneaker culture and ability to connect with our customers have been the driving forces of our growth ever since. Importantly, Foot Locker shares this passion, and we are excited to join forces with them to propel Atmos into our next phase of growth.”
“In addition to this highly strategic transaction with Atmos, we also separately announced today an acquisition that enhances our positioning in North America,” says Johnson. “Both transactions reflect our commitment to our growth strategy and engaging with new and incremental consumers. With our ongoing investments in the business, we are confident in our ability to continue creating significant long-term value for our shareholders, consumers, vendor partners and other stakeholders.”
The Atmos name will be retained, operating as a new banner in Foot Locker’s portfolio.
The transaction is expected to close late in the third quarter of 2021, subject to the satisfaction of customary closing conditions.