Foot Locker to close 400 stores by 2026

New York (CNN) Foot Locker plans to close 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 streamlining operations by closing underperforming mall-based stores.

The stores to be closed across North America account for nearly 10% of Foot Locker’s total sales, said Anthony Aversa, senior vice president of store development at Foot Locker.

Aversa disclosed the details to analysts during the company’s investor day on Monday.

Under the corporate umbrella, Foot Locker operates more than 3,000 Foot Locker, Kids Footlocker, Champs Sports, WSS and atmos stores globally.

Included in the store trimming are 125 underperforming Champs Sports stores, which will be closed this year.

The “reset”, as the company’s executives describe it to analysts, comes amid softer sales. Foot Locker reported fourth-quarter sales Monday that fell 0.3% compared to a year ago. The retailer also estimates that total sales will fall 3.5% to 5.5% in 2023.

Foot Locker (FL) noted that among its portfolio of brands, sales of non-Nike-branded products were up in the single digits, while the Nike mix was down — but “only slightly.” But Nike is Foot Locker’s largest brand partner and will remain so, executives said. The company wants to revitalize the Nike collaboration with a product concept celebrating Foot Locker’s 50th anniversary in 2024.

“Nike will continue to lead our brand portfolio and make up 55% to 60% of our mix,” said Chris Santaella, Foot Locker’s chief merchandising officer.

Appeals to younger and diverse shoppers

The new store concept and sales strategy – called “Lace Up” – will focus on specific segments of sneakers.

They include the sneaker, or sneaker-obsessed shoppers who represent themselves through their shoes; the fashion-forward expressionist who wants to look and feel cool and rely on his sneakers to deliver that feeling; the athlete looking for high performance sneakers; shoppers who prioritize quality and comfort; and finally the bargain hunters.

“These positionings will drive everything we do, including property site selection, product sales, omni-marketing and of course great customer service,” Bracken said.

Foot Locker CEO Mary Dillon told analysts she believes hybrid work is here to stay, fueling the strength and longevity of casual dressing.

“We’re not going back to less comfort in our lives, I can tell you that,” she said.

She said younger and more diverse customers are a strategic advantage for the company. “These are the fastest growing consumer segments in the United States and are rapidly expanding in purchasing power,” she said. “If you’re not winning with young diverse consumers in this category, you’re not winning in the long run.”

Aversa said Foot Locker plans to attract both older, loyal customers and new and younger customers in a few ways.

“We will scale new concepts with larger footprints to offer more engaging experiences with a wider product range,” he said, adding that the retailer will have more of its stores outside malls.

The reduction in real estate, he said, will be about a 10% reduction in store count through 2026 to 2,400 stores.

“However, we will increase our space by 10% to over 14.5 million square feet as we open up larger, more experiential expressions of our brands with a broader product range. New formats will surpass 400 locations,” Aversa said.

Source link

Back to top button

mahjong slot