Shoe Carnival acquires Midwestern shoe retailer
Shoe Carnival has acquired a Midwest footwear chain, expanding its store presence.
The footwear retailer has acquired Rogan Shoes, a work and family footwear company with 28 locations in Wisconsin, Minnesota and Illinois.The purchase price was put at $45 million, subject to further adjustments, with the transaction funded entirely with cash on hand.
The acquisition positions Shoe Carnival, which operated 429 stores in 36 states and Puerto Rico, as the market leader in Wisconsin. It also establishes a store base in Minnesota, creating additional expansion opportunities.
The deal is expected to generate approximately $84 million in sales and approximately $10 million in operating income for Shoe Carnival, excluding transaction and integration costs. Shoe Carnival said it has an 18-month integration plan in place and expects to capture an additional $1.5 million in synergies annually, with half of the profit synergies realized by fiscal 2025 and the full amount by fiscal 2026. The strategic and cost synergies will be achieved by integrating Rogan’s into the Shoe Station banner and leveraging the company’s existing systems and capabilities.
“Our growth strategy is focused on becoming the nation’s leading family footwear retailer through a combination of organic growth initiatives and M&A activity that expands our geographic footprint and customer base,” said Mark Worden, president and CEO of Shoe Carnival. “Over the past five decades the Rogan family has built a brand that is well known and trusted throughout the state of Wisconsin. As such, they have established a clear market leadership position in Wisconsin for work and family footwear, with a compelling assortment, great customer service and a highly committed team of employees.”
Founded in 1971 with its first store in Wisconsin, Rogan’s is one of the nation’s largest independent shoe retailers.
“I am excited about the new opportunities for Rogan’s as it becomes part of the Shoe Carnival family,” said Pat Rogan, CEO of Rogan’s. “We share a strong focus on customers and employees and this transaction provides the additional scale and expertise to drive future growth, create efficiencies and expand profitability with that shared focus as the foundation.”
In addition to the acquisition announcement, Shoe Carnival shared its fiscal 2023 preliminary results. Net sales were $1.176 billion, driven by strong sales growth during the December holiday period. Diluted earnings per share for 2023 are in line with expectations to be between $2.65 - $2.75.
Shoe Carnival said fiscal year 2023 marked the 19th consecutive year the company ended the year with no debt, fully funding operations, new store growth, and store remodels with cash on hand.