Metro Brands Shares Surge on Strategic Partnership with Foot Locker

Metro Brands Shares Surge on Strategic Partnership with Foot Locker

VoM News Desk | November 30, 2023 | 12:39 PM IST | Breaking News | Follow on Google News

Metro Brands Shares Surge on Strategic Partnership with Foot Locker

Significant Jump in Share Price: Metro Brands Shares Surge on Strategic Partnership with Foot Locker

Metro Brands Ltd.’s shares witnessed a notable surge of nearly 9%, reaching a 52-week high following the announcement of a strategic partnership with Foot Locker, Inc., a specialty athletic retailer based in New York. The share price opened at ₹1,371.50 on the BSE and touched an intraday high of ₹1,440.45.

Positive Market Outlook for Metro Brands

Ruchit Jain, Lead Research Analyst at 5paisa, commented on the positive trend in Metro Brands shares, noting a higher top higher bottom structure. The short-term trend is positive, with support levels identified around ₹1,300 and ₹1,200.

Details of the Partnership with Foot Locker

Metro Brands’ collaboration with Foot Locker involves a long-term licensing deal, granting Metro Brands exclusive rights to own and operate Foot Locker stores in India and sell authorized merchandise. Nykaa Fashion, as part of this partnership, will manage Foot Locker’s India website and sell authorized goods on its e-commerce platforms.

Impact and Potential of the Partnership

The partnership is seen as a significant move for Metro Brands, aligning with its vision to bring prominent global brands to India and revolutionize the sneaker market. Nissan Joseph, CEO of Metro Brands Ltd., expressed enthusiasm about enhancing the retail experience and meeting the dynamic needs of customers through this collaboration.

Brokerage Viewpoint and Valuation

Domestic brokerage Nuvama Institutional Equities views the tie-up as value-adding, given Metro Brands’ expertise in premium retail and the uniqueness of Foot Locker’s offerings in the Indian market. The expansion in the athletic and sneaker footwear market is anticipated to benefit from this partnership.

The brokerage has raised its target price for Metro Brands to ₹1,304, up from the previous target of ₹1,142, retaining a ‘hold’ rating. The new target is based on a 55x multiple on Q3FY26 earnings, factoring in the potential growth opportunities from the partnership. The brokerage expects at least 200 stores growth potential, similar to the size of Crocs’ current presence.

Investor Outlook

The Foot Locker partnership brings a new dimension to Metro Brands’ business strategy, potentially leading to expanded market presence and diversification. Investors and market analysts will be closely monitoring the implementation and impact of this strategic collaboration on the company’s performance and growth trajectory.

VoM News Desk

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.