- Sara Ehlers |
Shoe retailer DSW announced today that the company is planning to acquire Ebuys Inc., an international e-commerce footwear retailer. The transaction is a way for the DSW brand to grow its market globally and domestically within the footwear market.
Ebuys Inc. is heavily prominent in North America, Europe, Australia, and Asia as a footwear and accessories e-commerce business. Acquiring the business allows DSW to start expanding in a new digital platform. “The acquisition of Ebuys, Inc. represents a unique opportunity to add a business to the DSW Inc. portfolio that will strategically scale our off-price sourcing [capabilities],” said Roger Rawlins, chief executive officer of DSW. The new business transaction will also “expand [DSW’s] presence into digital marketplaces and create opportunities to serve international customers online.”
DSW acquires e-commerce retailer Ebuys
Ebuy’s chief executive officer David Duong’s e-commerce strategy was another factor in why DSW wanted to acquire the company. “[Duong] has build a strong leadership team and developed an excellent off-price e-commerce model that complements DSW’s growth strategy,” said Rawlins. Together, the two companies plan to grow both companies and better serve their customers. With the new acquisition, the companies will then combine their customer base and focus on achieving their long-term growth and expansion goals.
The purchase price for the acquisition is an upfront payment of 62.5 million dollars. Additionally, DSW will have future payments that are contingent on the performance of Ebuys. DSW expects that the earnings from the business deal minus purchasing and transaction costs will be accretive to earnings per share in fiscal 2016. The acquisition will close officially within the next 30 days.
Ebuys, founded in 2003, will still continue to operate as its own business under DSW. DSW currently operates 469 stores in 41 states, the District of Columbia and Puerto Rico. Also, the company supplies footwear to 378 locations in the United States under the Affiliated Business Group. Ebuys will continue to operate from its existing offices in San Diego, Calif. and Antioch, Tenn. Duong will also continue his role as chief executive officer of the company.