Metro Brands share price surges nearly 9% to touch 52-week high on partnership with Foot Locker | Mint
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Business News/ Markets / Stock Markets/  Metro Brands share price surges nearly 9% to touch 52-week high on partnership with Foot Locker
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Metro Brands share price surges nearly 9% to touch 52-week high on partnership with Foot Locker

Metro Brands share price jumps nearly 9% following strategic partnership with Foot Locker. Metro Brands has been granted exclusive rights to own and run Foot Locker stores in India and to sell authorised merchandise in Foot Locker stores.

Metro Brands share price opened at ₹1,371.50 apiece on BSE. Metro Brands Ltd's share price today touched an intraday high of ₹1,440.45 and a low of ₹1,366.80. (iStock)Premium
Metro Brands share price opened at 1,371.50 apiece on BSE. Metro Brands Ltd's share price today touched an intraday high of 1,440.45 and a low of 1,366.80. (iStock)

Metro Brands share price jumped nearly 9% to touch a 52-week high on Thursday's trade following the company's announcement on Wednesday of a strategic partnership with New York-based specialty athletic retailer Foot Locker, Inc. Metro Brands share price opened at 1,371.50 apiece on BSE. Metro Brands Ltd's share price today touched an intraday high of 1,440.45 and a low of 1,366.80. 

According to Ruchit Jain, Lead Research Analyst at 5paisa, Metro Brands shares has been forming higher top higher bottom structure. The short term trend is positive with support levels around 1,300 and 1,200.

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Foot Locker has inked a long-term licencing deal with Metro Brands and Nykaa Fashion, according to the company's exchange filing. Through this collaboration, Indian sneakerheads will have access to the widest range of international sportswear and footwear.

Metro Brands has been granted exclusive rights under the agreements to own and run Foot Locker stores in India and to sell authorised merchandise in Foot Locker stores. As the sole e-commerce partner, Nykaa Fashion will run Foot Locker's India website and sell authorised goods through a Foot Locker-branded store on Nykaa's already-existing e-commerce platforms.

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“At Metro Brands, our vision is to bring the finest global brands to India and cater to the complete shoe wardrobe of our customer. This partnership is a big step in that direction. It will also help us pave the way in revolutionising the sneaker market, enhancing the retail experience, and meeting dynamic needs of our customers," said Nissan Joseph, CEO, Metro Brands Ltd. 

Given Metro's track record and partnership with Crocs, the Foot Locker tie-up with the domestic brokerage Nuvama Institutional Equities is a value-adding one. Moreover, Metro excels at premium retail, which is what Foot Locker does.

Second, as far as brokerage is concerned, there aren't many formats available that are comparable to Foot Locker's offerings in India.

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Thirdly, the expansion of the athletic and sneaker footwear market. The brokerage anticipates Metro to be aware of the fact that unit economics are still a work in progress. Comparably, the brokerage thinks this format has the potential to grow stores by at least 200, which is the size of Crocs at the moment.

"To factor in the opportunity, we raise our target multiple to 55x (Q3FY26) with a revised target price of 1,304 (earlier target price of 1,142). Retain 'hold' rating. There is scope for further valuation, but that will be cognizant of more clarity on the tie-up," the brokerage said.

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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 30 Nov 2023, 11:27 AM IST
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