Foot Locker to close more than 400 stores ahead of brand reset
(CBS News) -- Foot Locker plans to shutter more than 400 of its in-mall stores as it pivots its business strategy to connect with niche markets.
The store closures are part of the company's "Lace Up" plan to "reset" its business and grow its total revenue to $9.5 billion by 2026, Foot Locker executives said this week at an investor event in New York City. As part of that plan, Foot Locker will diversify its brand portfolio, embracing new standalone store formats that offer a wider selection of products for sneaker lovers.
"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.
Foot Locker's decision to close more than 400 of its mall-based outlets by 2026 comes as the brand gears up to open more than 300 free-standing concept stores in three varieties: "Community" stores serving neighborhoods with a "passion for sneakers," such as the brand's Compton store in Los Angeles, California and its Santoni outpost in Paris, France; "House of Play" stores, a larger format of Kids Foot Locker offering "elevated storytelling and product presentations"; and "Power" stores featuring a "full-family assortment" of products with a "broader reach."
Foot Locker has three locations in the Pittsburgh area. There is one downtown, at Ross Park Mall and at the Mall at Robinson.
Older, wealthier sneakerheads
One Power store serving the Dallas-Fort Worth community in Texas is attracting "older and higher income shoppers" to Foot Locker, which traditionally serves a "young diverse" consumer base, Dillon said.
"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 is showing that we can have a broader reach at Foot Locker."
The sneaker merchant expects to get 50% of its revenue from its North American stand-alone stores following the roll out of "new concept" stores, its executives said at the event. In-mall stores currently account for 35% of the brand's revenue, Business Insider reported.
Foot Locker's decision to zero in on niche markets through its new experience-focused stores comes as sneaker sales are growing. Global sneaker sales reached $152.4 billion in 2022, a 2.7% increase from sales the previous year, the Business of Fashion reported. That number could grow to nearly $216 by billion 2031, according to a report from Allied Market Researcher, a market analysis firm.