Shares of Boot Barn Holdings Inc. in Irvine rose 10.6% to $27 and a market value of $695 million after it announced an agreement to buy western apparel and footwear retailer Sheplers Inc. for $147 million.
Wichita, Kan.-based Sheplers has 25 stores that complement Boot Barn’s footprint and will continue under the Boot Barn brand name. Combined operations will encompass 200 stores in 29 states.
“[The acquisition] enhances our position in … Texas … where our average store volume tends to be higher,” Jim Conroy, Boot Barn’s chief executive, said during a conference call following the announcement. “We still intend to open 22 Boot Barn stores (this fiscal year.)”
Sheplers’ revenue for the 12 months ending March 28 was about $157 million, $66 million of which came from its e-commerce division. The sheplers.com website will continue as is.
The company said the acquisition is expected to be accretive to Boot Barn’s earnings and generate $6 million to $8 million annually.
Boot Barn also said it expects cost savings to come from scale purchasing, increased private brands cross-penetration, and consolidation of corporate functions.
Conroy also said Sheplers’ ecommerce efforts would be a source of “best practices online that we can bring to bootbarn.com.”
Sheplers has a “fulfillment center based in the middle of the country,” Conroy said, adding that Boot Barns plans to leverage it “for both brands … which will shorten the lead time and reduce the expense of shipping.”
Boot Barn has a fulfillment center in Irvine.
The transaction is expected to close by June 29.
