Shoe, hat and accessory firm Genesco said its Hat World subsidiary has entered into a deal to buy Hat Shack, which operates 49 stores in ten US states, primarily in the Southeastern US.

The purchase price for Hat Shack is US$18m, subject to adjustment based on net asset levels at closing.

Closing of the transaction, which is subject to customary conditions, is expected in the fourth quarter of fiscal 2007 or first quarter of fiscal 2008.

Hat World president Kenneth J Kocher said: "We look forward to strengthening Hat World's position as the leading retailer of headwear in North America through the acquisition of Hat Shack's stores.

"Hat Shack has been a primary competitor in the Southeastern US, and adding its 49 stores to our existing base of more than 700 stores will represent a significant step forward in our plans for continuing store growth."

Genesco said it expects the acquisition to have a slightly positive effect on the company's earnings for the fiscal year ending 2 February 2008.

Genesco, which is based in Nashville, has more than 1,900 retail stores in the US and Canada.