Retail brand management firm Grupo Axo will acquire Nike’s operations in Argentina, Chile and Uruguay, the company said, and Grupo SBF SA <CNTO3.SA> through its subsidiary will become the owner of the Nike’s Brazilian operations.
The transaction is expected in the third quarter of fiscal 2020, Nike said.
The company said expanding this model in South America will help drive sustainable, profitable growth, but it will take a one-time charge of about $425 million related to foreign exchange.
Shares of Grupo SBF, which also owns Brazilian sports goods chain Centauro, rose 5% in early trade. Nike shares were flat at $100.75
Nike has been focusing on its direct-to-consumer business, a strategy that includes targeting online sales, product launches and supply chain improvements to bring new products to shelves faster.
(Reporting by Nivedita Balu in Bengaluru; Editing by Bernard Orr)