Foot Locker to close 400 mall stores as it shifts focus to niche shops for sneakerheads, kids, and higher-income shopper

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Foot Locker to close 400 mall stores as it shifts focus to niche shops for sneakerheads, kids, and higher-income shopper

Post by mbz321 »

https://www.businessinsider.com/foot-lo ... res-2023-3

Foot Locker said it will close more than 400 stores in shopping malls, part of a new business plan meant to "reset" the company.

Executives for the sneaker retail chain unveiled the store-closure plan at a Monday investor day in New York City. Foot Locker's "Lace Up" business plan also includes opening free-standing stores for niche audiences.

The plan seemingly left Wall Street unconvinced. Foot Locker shares were down more than 5% for the day despite the stock market trending slightly upward. Foot Locker also reported quarterly earnings on Monday above forecasts, but it offered sales guidance lower than expected.

The company didn't immediately respond to an email from Insider seeking details on expected store closures.

Foot Locker has about 1,300 stores in malls in North America. It expects to close as many as 420 by 2026 to focus on its best-performing stores. The company expects to close 25% of its stores in A- and B-rated malls and 50% of its stores in C- and D-rated malls.
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Re: Foot Locker to close 400 mall stores as it shifts focus to niche shops for sneakerheads, kids, and higher-income sho

Post by Brian Lutz »

Refocusing a company to chase after collector markets seems to be a rather risky proposition, especially because sneaker collecting looks suspiciously like a bubble waiting to pop (especially when people start to figure out that all of their $200-a-pair Air Jordans are made of materials that start to degrade in a matter of a few years.) Then again Foot Locker has pretty much been a fashion accessory store rather than a shoe store for years now, so shifting to collector markets probably isn't much of a stretch for them.
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Re: Foot Locker to close 400 mall stores as it shifts focus to niche shops for sneakerheads, kids, and higher-income sho

Post by ClownLoach »

Brian Lutz wrote: March 20th, 2023, 9:15 pm Refocusing a company to chase after collector markets seems to be a rather risky proposition, especially because sneaker collecting looks suspiciously like a bubble waiting to pop (especially when people start to figure out that all of their $200-a-pair Air Jordans are made of materials that start to degrade in a matter of a few years.) Then again Foot Locker has pretty much been a fashion accessory store rather than a shoe store for years now, so shifting to collector markets probably isn't much of a stretch for them.
If any CEO has a chance to fix this, it is Mary Dillon. I do think this is the toughest assignment she has ever faced. Aside from the niche of collectors I don't see any other angle that this business can grow in.
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Re: Foot Locker to close 400 mall stores as it shifts focus to niche shops for sneakerheads, kids, and higher-income sho

Post by storewanderer »

Foot Locker seems like one of those chains that never closes stores. Some malls have multiple locations. They seem to always be about the last store to close in a dead mall.

As fewer and fewer retailers sell Nike that is likely driving more customers their way and also eliminating some previous price competition on those products to help their margins. Collecting this shoe type strikes me as a rather odd proposition but women have so many shoes you could say they also collect shoes so maybe the strategy group is just trying to extend shoe collecting to athletic shoes as shoe collecting already occurs with various women's shoe types.

I'm not confident the freestanding stores will go anywhere.
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Re: Foot Locker to close 400 mall stores as it shifts focus to niche shops for sneakerheads, kids, and higher-income sho

Post by Brian Lutz »

One thing I could seem them doing is moving away from selling things like running shoes, hiking boots and similar items. The problem with those items is that places like REI and various specialty running shops (typically single locations or small local chains) sell all of those types of shoes (brands like New Balance, Brooks, Asics and similar for running shoes and brands like Columbia Merrell and Salomon for hiking) at the same prices or better, and who have people that specialize in shoes for runners or hikers, where the target audience for a Foot Locker type store are more interested in fashion than function.
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Re: Foot Locker to close 400 mall stores as it shifts focus to niche shops for sneakerheads, kids, and higher-income sho

Post by buckguy »

It's more than just getting out of malls (a lot of those stores will be Champs locations). They're making significant changes to their foreign operations and going in more new directions then described in the first link

https://footwearnews.com/2023/business/ ... 203434824/
https://footwearnews.com/2023/business/ ... 203433555/
https://footwearnews.com/2023/business/ ... 203433991/

The numbers don't all add up for all of this---it requires agility to close that many stores and open so many new ones. They seem a decade late with opening more kids stores--the brithrate has been declining for awhile. And I wonder how they plan to reach the bargain buying market. You can't be all things to all people even if you have a few subchains. They all need strong management and they seem to have been floundering for awhile. Also, non-mall complexes may be less interested in having ultiple sneaker stores than malls, which have always had a lot of shoe stores and multi-platform retailers, esp. in the pre-sneaker days when there were more shoe retailers.

While police were needed to keep the crowds from holding up traffic for the latest NIKe new release (saw yjis happena few days ago at a local sneaker retailer), that only happens once in awhile and won't carry a business forward. There are plenty of other places that sell Hoka and On (the new hot brands) and Nike seems content to limit who can sell their most expensive lines. They also have very ambitious plans for customer loyalty---they must be hoping that they can bring in the hard core buyers and provide enough incentives for those shoppers to buy everything at one of their chains, but that probably will cost them some profits in the process.
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Re: Foot Locker to close 400 mall stores as it shifts focus to niche shops for sneakerheads, kids, and higher-income sho

Post by Retailuser »

For a store that never had anything that I wanted is this change going to change it?
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