Foot Locker, Inc. is selling its Eastbay Team Sales business to BSN Sports, a direct marketer and distributor of sporting goods, footwear, apparel and branding to the school and league markets. Terms were not disclosed.
The specialty athletic retailer said in a recent statement that the Eastbay divestment sharpens Foot Locker’s focus on its core consumer business, which it has sought to diversify with more brand partnerships and even new retail outlets, like the Atmos and WSS banners it acquired for $1.1 billion late last year. The move comes as the company is converting more of its retail stores into community -driven “power stores” and feeling the impact of Nike’s recent product pullback in a shift to DTC.
Founded in 1980 and originally established to meet the performance needs of local high school and college athletes in Central Wisconsin, Eastbay Team Sales is a supplier of athletic footwear, apparel and sports equipment to high school and college athletes nationwide.
The Eastbay Team Sales business appears to align more with its new parent. BSN Sports markets and distributes its products to over 150,000 institutional and team sports customers in colleges and universities, middle and high schools, and recreational programs throughout the U.S. via catalog, e-commerce and direct sales.
“We are very pleased for the Team Sales business to become part of BSN Sports,” said Richard Johnson, chairman and CEO of Foot Locker, Inc. in a statement. “For more than three decades, the Team Sales business has connected directly with high school coaches and athletic directors across the U.S. to offer the best performance product and a premium service level, and we are confident that the business and its experienced team of professionals have a promising future as part of the BSN Sports organization.”
Foot Locker first acquired Eastbay Team Sales when it scooped up Eastbay in 1997, integrating its direct mail catalog as an additional distribution channel for athletic footwear, apparel and equipment.
The Team Sales business has historically accounted for less than 1 percent of Foot Locker’s annual consolidated sales. The transaction is expected to close in the coming weeks, according to a company statement.
As part of the divestment, Foot Locker also announced it will fully consolidate the Eastbay.com retail website into the Champs Sports banner, completing the integration of those two banners that began in 2019. The Champs x Eastbay partnership was designed to further inspire and empower high school athletes in their journey on and off the court and field, with the launch of two brands late last year: Eastbay Performance and Uninterrupted.
BSN Sports, a division of Varsity Brands, has over 1,100 field sales professionals serving coaches and athletic directors in virtually every zip code in the U.S. The company supports these field sales professionals with category managers, territory managers and customer service representatives. The company also built a marketing infrastructure designed enables the sales professionals to provide customers with a complete and customized one-stop shopping experience.
“We are excited that the employees of Eastbay Team Sales will be joining the BSN Sports family, which is dedicated exclusively to serving athletes, athletic directors and coaches who impact more lives in a year than most people do in a lifetime,” said Terry Babilla, president of BSN Sports. “This dedicated approach means that our new sales professionals will benefit from the best and broadest inventory selection, leading design and customization tools and support resources as they deliver the stellar service experience all customers deserve. We welcome the Eastbay Team employees to the BSN Sports family and look forward to a productive and rewarding integration of our teams headed into the 2022-2023 school year.”
Evercore is serving as financial advisor, and Morrison Cohen LLP as legal counsel, to Foot Locker.
The sale also comes nearly a month after Foot Locker named its first-ever chief strategy and transformation officer, Neil Bansal, who will oversee the athletic retailer’s global transformation strategy. Bansal joins Foot Locker from Constellation Brands, where he served as senior vice president, strategy, insights and analytics.
At the end of the 2021 first quarter, total sales at Foot Locker increased by 1 percent, to $2.18 billion, compared with sales of $2.15 billion. In the period, comparable store sales decreased by 1.9 percent, with apparel significantly outpacing footwear. Total net income was $133 million.
For the full year, Foot Locker expects sales at the upper end of a decline of 4 percent to 6 percent. Earnings per share for the fiscal year ending in late January 2023 are now projected to be at the high end of the $4.25 to $4.60 forecast range.