Elusive sneakers will soon be more accessible than ever with the announcement that online sneaker retailer GOAT is merging with sneaker consignment shop, Flight Club.
The major deal comes with a massive injection of US$60 million from investors in a move which should see the two companies dominate the online retail landscape in the $55 billion global sneaker industry.
Before the announcement, both companies provided a service built on delivering hard-to-find footwear. This service will continue ahead with each company maintaining their own brand whilst GOAT integrates Flight Club into its technology systems.
Eddy Lu, GOAT’s co-founder and CEO, said in a statement that, “the merger will allow us to significantly scale our online and retail operations to meet customer demand both domestically and internationally”.
According to Recode, a majority of the US$60 million funding will go towards buying out Flight Club shareholders’ stakes in the business. A GOAT representative however declined to comment, saying that the company does not discuss financial terms with the public. They did however confirm that the deal was completed with a combination of cash and stock.
The merger of the world’s most disruptive sneaker retailers was conceived from a mutual admiration of one another, GOAT co-founder Daishin Sugano told Business Insider. Sugano himself says that he was inspired by Flight Club, a store which began selling collectible footwear in Los Angeles and New York in 2005 which has amassed a cult following of sneakerheads.
“The reason GOAT exists at all is because Flight Club innovated the market,” Sugano said.
GOAT is no sleeping giant either. The mobile app which debuted in 2015 offers more than 400,000 pairs of kicks and is a direct competitor to eBay’s own sneaker store. They’ve succeeded thus far with a company valuation of US$200 million.
“We’re innovating the sneaker market with technology,” explained Sugano. By teaming up with Flight Club, “you have the future of retail,” he added.
Their investors also shared similar sentiments. Index Ventures is the firm that looked after GOAT’s latest funding round and its partner, David Rimer, believes that there’s massive potential in their investment.
“The sneaker market is…in [its] relative infancy,” Rimer told Business Insider. “The opportunity is really big”.