JD Sports has agreed a billion-dollar deal to buy major American retailer Hibbett that will add more than 1,000 stores to the group.

Hibbett is a sports fashion-inspired retailer and has 1,169 stores spread across 36 states.

Régis Schultz, chief executive of JD Sports Fashion, said: “Hibbett’s footprint is highly complementary, adding a stronger presence in communities across the southeastern US, where we currently have a limited presence. It will also provide a stronger platform for the rollout of the JD fascia in the US.”

The deal is expected to be earnings accretive before the impact of cost savings, which are estimated to be at least $25m (£20m) per year over the medium term.

He added: “It will also strengthen further our key brand partner relationships in the largest sportswear market in the world.”

The cash deal is for $1.08bn (£878m) and will be financed through the retailer’s existing US cash resources of $300m and a $1bn extension to its existing bank facilities.

Last year Hibbett generated a pre-tax profit of $131.6m (£107m) on sales of $1.73bn (£1.40bn).

The combined group will have annual sales in North America of £4.7bn and account for around 40% of JD’s total.

In October, JD took sole control of European retailer Iberian Sports Retail Group (ISRG) after paying €500m (£430m) for the remaining half of the business.

JD’s shares rose 6.32% in early trading this morning following the announcement.

Russ Mould, investment director at Manchester investment platform, AJ Bell, said: “Investors were excited about JD Sports’ acquisition of US firm Hibbett – a deal which builds on its existing presence across the Atlantic.

“UK retailers haven’t always fared too well in the States but JD’s 2018 acquisition of Finish Line has proved a rare success story as the company leveraged the experience of the latter’s US management and built on this success with a further deal for Shoe Palace a few year later.

“This latest deal is for an established brand which dates back to the 1940s and has good relationships with other leading sportswear brands as well as operating from prime locations.

“Time will tell if this was the right use of capital over and above further returns to shareholders or buying back stock after a difficult period for the share price.

“JD faces the same challenges in the US, which looks set to be 40% of the business if this deal goes through, as it does in the UK. Namely, shifting customer appetites, pressures on their ability to spend hundreds of pounds on must-have trainers and the impact of sportswear giants like Nike and Adidas pursuing a direct-to-consumer led strategy.”