Footwear and accessories retailer Genesco Inc has signed a definitive agreement to acquire headwear group Hat World Corporation for $165 million.

Tennessee-based Genesco said it expected the purchase, funded through a combination of cash on hand and $115m in debt, to be completed by the end of the current fiscal quarter.

"We are very excited about this transaction as it represents a tremendous fit with our organisation from a strategic, financial, operational and cultural standpoint," Genesco CEO Hal Pennington said.

"Hat World is a leading specialty retailer with a strong track record, outstanding management and compelling store economics, and we believe we can open an additional 400 to 500 Hat World stores over time."

As part of the deal, Hat World CEO Robert Dennis and his senior management team will continue to lead the company under Genesco.

Indianapolis-based Hat World operates 481 stores across the United States under the Hat World, Hat Zone, Lids and Cap Factory trade names.