Dive Brief:

• Footwear retailer Shoe Carnival acquired the Shoe Station chain for $67 million, according to a press release. The deal represents Shoe Carnival's first acquisition in its history, the company said.
• Shoe Station, family-owned until the acquisition, operates 21 stores located in the Southeastern U.S. Shoe Carnival said the chain would add roughly $100 million in net sales to its books.
• With the acquisition, Shoe Station CEO Brent Barkin is set to become Shoe Carnival's senior vice president of new business development and integration, and will continue to lead Shoe Station.

Dive Insight:

Shoe Carnival has been quietly growing in sales over the past two decades or so leading up to the pandemic, at an average rate of nearly 5% a year, according to the company. The retailer's nearly 380 stores (sans Shoe Station) on average make about $2.5 million a year.

The pandemic reversed Shoe Carnival's long pattern growth, but only slightly, with 2020 sales falling 5.8% to $976.8 million. And this year it's back on track. In the third quarter, the retailer's traffic was up 40% and comparable sales jumped more than 30%.

In its Q3 release, Shoe Carnival CEO Mark Worden said of the company's performance, "This was by every measure that matters, our best quarter, of our best year, in our 43-year history." He added that operating income was "three times higher than the results of any prior third quarter."

Worden elaborated in a November conference call with analysts. "We're seeing families flocking to our bright, clean, fresh, modern stores and liking what they find there," he said. "Our customers are more excited than ever about getting out of their homes and into our stores. And with that in mind, we're accelerating investment in building the best-in-class loyalty and CRM platforms."

The retailer's core customers are working class families with school-aged kids. It says its stores are located in the "best centers" with neighbors like T.J. Maxx, Ross, Kohl's, Old Navy, Five Below and others.

The company's chief has repeatedly said Shoe Carnival aims to be multi-billion dollar brand. He reiterated the company's growth ambitions in the announcement of the Shoe Station acquisition, and said the deal would accelerate that effort.

Bringing on Barkin, who is the son of Shoe Station's founder, is a sign that Shoe Carnival wants more from Shoe Station than just some added stores and sales. The company said that Shoe Station "has a strong track record of capitalizing on emerging footwear fashion trends and introducing new brands to its customers."