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December 6, 2021updated 25 Jan 2022 8:49am

Shoe Carnival acquires Shoe Station for $67m

US footwear retailer Shoe Carnival has acquired substantially all of the assets of privately-held, family-owned Shoe Station, Inc for US$67m, subject to customary adjustments.

By Beth Wright

The acquisition marks the first in the history of Shoe Carnival and will see the company own and operate Shoe Station’s five stores across the Southeast.

The addition of a new brand and new retail locations to the Shoe Carnival portfolio creates a complementary retail platform to serve a broader customer base across both urban and suburban demographics, Shoe Carnival says.

It adds Shoe Station has a strong track record of capitalising on emerging footwear fashion trends and introducing new brands to its customers.

The acquisition was funded through cash on hand.

“We are excited to welcome Shoe Station to the Shoe Carnival team,” says Mark Worden, Shoe Carnival’s president and CEO. “Coming on the heels of our best quarter of our best year in our 43-year history, this deal accelerates our journey toward becoming a multi-billion dollar retailer in the years ahead.”

Shoe Station’s current president and CEO G Brent Barkin, will become the company’s senior vice president, new business development and integration, reporting to Worden.

Barkin will continue to lead Shoe Station while focusing on new business growth opportunities for the combined company.

“Shoe Carnival brings infrastructure and financial backing to significantly accelerate our Shoe Station brand growth,” he says. “Taken together, the two brands create a winning customer value proposition.”

The transaction is expected to be immediately accretive to diluted net income per share in fiscal 2022, contributing about $100m in incremental net sales, with operating income exceeding 10% on a normalised basis. After closing, the company will have more than $100m in cash on hand, consistent with cash reserves from the same period in fiscal 2020.

It says with the addition of Shoe Station to its portfolio, Shoe Carnival expects to surpass 400 stores by the end of 2022, on a path to double-digit new store growth in the years ahead.

“Brent and his team share our values and vision for the future of family footwear retail,” Worden adds. “Together, we are ready to create a multi-billion dollar company, defined and driven by traits that made us industry leaders today. We look forward to building on our joint success as we continue our growth trajectory and driving significant long-term value for all of our stakeholders.”

Shoe Carnival recently reported a record quarterly net income of $46.8m for the third quarter ended 30 October, with net sales also hitting a new record of $356.3m and a quarterly comparable-store sales increase of 30.1%.

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