The future of the shoe and athletic apparel store Foot Locker has been revealed in a significant statement. As part of an impending “brand reset,” the corporation plans to close over 400 locations worldwide. With this decision, the company hopes to streamline its operations, hone in on its core business, and better respond to the shifting retail market. Investors and shoppers are asking how this may affect Foot Locker moving forward.
Foot Locker Closing Announcement
Foot Locker plans to close more than 400 mall-based locations as part of its strategy shift toward serving specialized markets. During a recent investor event in New York City, Foot Locker executives explained that the store closures are part of the company’s “Lace Up” plan to “reset” the business and increase revenue to $9.5 billion by 2026.
Foot Locker will expand its assortment of brands and merchandise for sneakerheads by opening new, freestanding retail locations as part of this strategy. “The sneakerhead mindset is on the rise, with sneakers becoming a favorite avenue for individual expression where newness and collectibility truly fuel demand for more,” Foot Locker CEO Mary Dillon said at the event. The CEO of Foot Locker reveals his strategy for improving the company.
You can view a tweet concerning the closure of Foot Locker that was posted by CNN here.
Foot Locker plans to shut 400 stores by 2026 as it strives to become more relevant to younger shoppers by relaunching its retail brands, introducing “experiential” new store concepts and simplifying operations. https://t.co/c9tJdTx2CY
— CNN (@CNN) March 21, 2023
More than 400 of Foot Locker’s mall-based outlets will be shut down by 2026, while the company plans to open more than 300 freestanding concept stores in three different formats: “Community” stores serving neighborhoods with a “passion for sneakers,” like the company’s Compton store in Los Angeles and its Santoni outpost in Paris. “House of Play” stores, a larger format of Kids Foot Locker offering “elevated storytelling and product presentations” and a “New” design.
Dillon claims that the Dallas-Fort Worth area Power store is bringing in “older and higher income clients” to Foot Locker, which has previously catered to a “young diverse” clientele.
“These [power] stores are seeing a significant increase in suburban consumers with increasingly higher household incomes,” said Anthony Aversa, COO of WSS, a Foot Locker subsidiary company, during the event.” This shows that we can have a broader reach at Foot Locker.”
After introducing “new concept” stores across North America, the sneaker retailer anticipates a 50% increase in income from its standalone locations. Business Insider stated that 35 percent of the brand’s revenue now comes from mall stores.
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As demand for sneakers rises, Foot Locker has decided to capitalize on this trend by opening “experience stores” that cater to specific market subsets. The Business of Fashion estimated that in 2022, sneakers sales would be $152.4 billion, up 2.7% from the previous year. According to a survey by Allied Market Researcher, a market intelligence firm, that figure might rise to over $216 billion by 2031.
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