NEW YORK (CNN) Foot Locker plans to close 400 stores by 2026 as the company seeks to be more relevant to younger shoppers by revitalizing its retail brands, introducing “experiential” new store concepts and expanding its operations by closing underperforming stores simplified in shopping malls.
The stores scheduled to close across North America account for nearly 10% of Foot Locker’s total sales, said Anthony Aversa, Foot Locker’s senior vice president of store development.
Aversa provided the details to analysts during the company’s investor day on Monday.
Under its umbrella, Foot Locker operates more than 3,000 Foot Locker, Kids Footlocker, Champs Sports, WSS and atmos stores worldwide.
Included in the store cut are 125 underperforming Champs Sports stores that will close this year.
The “reset,” as the company’s executives are describing to analysts, comes amid weaker selling. Foot Locker on Monday reported fourth-quarter sales fell 0.3% year over year. The retailer is also forecasting a 3.5% to 5.5% decline in overall sales in 2023.
Foot Locker (FL) noted that across its portfolio of brands, sales of non-Nike branded products grew at a mid-single-digit rate while the Nike mix declined — albeit “only slightly.” But Nike is and will remain Foot Locker’s largest brand partner, executives said. The company aims to revive its Nike partnership with a product concept to celebrate Foot Locker’s 50th anniversary in 2024.
“Nike will continue to lead our portfolio of brands and make up 55-60% of our mix,” said Chris Santaella, Foot Locker’s chief merchandising officer.
Advertise to younger and diverse buyers
The new store concept and sales strategy – dubbed “Lace Up” – will focus on specific segments of sneaker buyers.
These include the sneaker maven, or sneaker-obsessed shoppers who represent themselves through their shoes; the fashion-forward expressionist who wants to look and feel cool and relies on his sneakers to make that feel; the athlete looking for high-performance sneakers; buyers who value quality and comfort; and finally the deal hunters.
“These positionings will drive everything we do, including real estate location selection, product merchandising, omni-marketing and of course, great customer service,” Bracken said.
Foot Locker CEO Mary Dillon told analysts she believes hybrid work lasts and promotes the strength and longevity of casual wear.
“We will not return 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 US and their purchasing power is growing rapidly,” she said. “If you don’t win in this category among young, diverse consumers, you don’t win in the long run.”
Aversa said Foot Locker plans to attract older, loyal shoppers as well as new and younger customers in a variety of ways.
“We will scale new concepts with greater presence to offer more engaging experiences with a broader range of products,” he said, adding that the retailer will have more of its stores outside of malls.
The reduction in properties, he said, will mean a reduction in the number of stores by about 10% to 2,400 stores by 2026.
“But we will increase our space by 10% to over 14.5 million square feet as we open up larger, more tangible expressions of our brands with a broader range of products. New formats will exceed 400 locations,” Aversa said.