India markets closed

Chinese sportswear company acquires K-Swiss

A general view of atmosphere at the K-Swiss Party to launch the Vintage California Collection at Kitson on April 29, 2010 in Malibu, California. (Photo by Michael Buckner/WireImage)

Chinese sportswear company Xtep International Holdings Ltd has acquired American athletic shoe brand K-Swiss and its associated brands Palladium and Supra (KSGB) from E-Land Footwear USA Holdings Inc. for $260 million.

The K-Swiss brand was founded in California in 1966 by Swiss brothers Art and Ernie Brunner. K-Swiss has a spot in sneaker lore as it was the first-ever brand to produce an all-leather tennis shoe.

Xtep, founded in 1989, and the brand produced athletic footwear for other brands — and eventually became a standalone brand in 2001. The Chinese retailer based in Hong Kong specializes sportswear that aims to be stylish and functional. Xtep manages a vast distribution network. The company has exclusive distributors that operate over 6,200 stores in China, which spans 31 provinces.

Sneaker Street, athletic shoe store. (Photo by: Jeffrey Greenberg/Universal Images Group via Getty Images)

Xtep plans to bring added innovation to the brands and make improvements in supply chain and retail model to the K-Swiss, Palladium, and Supra brands. The hope is that these moves will position the brands as a more prominent force within China's ever-expanding sneaker market. Cowen Equity Research, predicts that sneaker sales and resale growth will continue to rise in China, with Shanghai, in particular, emerging as a massive frontier for the sneaker business.

"With KSGB now part of the Xtep group, we are ready to take these iconic brands to the next level of growth and prosperity." Said Xtep Founder, Chairman, and CEO Mr. Ding Shui Po.

Michael Yuan, President of Xtep Global Brands Group and CEO of KSGB, will lead the KSGB business, alongside Xtep Corporate Development Director James Ting as the CFO of KSGB. The merged companies will operate at Xtep's global headquarters in Hong Kong as well as KSGB's global headquarters in Los Angeles.

Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.

Read more:

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.