Foot Locker is undertaking an operational shakeup and is set to close over 400 stores as part of its ‘Lace Up’ plan.
Foot Locker is set to close over 400 stores across its 2,714 stores in 29 countries. The company operates in North America, Europe, Asia, Australia, and New Zealand, and has 159 franchised stores in the Middle East and Asia.
The closures will be made primarily in the US within shopping malls and expected to be undertaken before 2026. It has not announced any closures of its more than 100 stores across Australia, but this could signal that the company may have plans lined up to do so in its big shake up.
“We are entering 2023 with a focus on resetting the business – simplifying our operations and investing in our core banners and capabilities to position the company for growth in 2024 and beyond,” said Foot Locker President and CEO Mary Dillon.
As part of this reset, Foot Locker is set to majorly scale back its presence throughout Asia. The company is set to close its stores and ecommerce offerings in Hong Kong and Macau, as well as convert its model to a future-growth license model across its currently owned and operated ecommerce and physical stores in Singapore and Malaysia.
Released last week week, the company’s fourth quarter results for 2022 showed a total sales decrease of 0.3 percent to $2,334 million USD, however, comparable-store sales increased 4.2 percent. Foot Locker’s net income decreased to $19 million USD as compared with $103 million USD in the fourth quarter of fiscal 2021.
During the fourth quarter, Foot Locker opened 21 new stores, remodel or relocate 45, and closed 101 stores.
The business reset will see Foot Locker undertake a new plan to return to profitability, The “Lace Up” plan will be guided by the following set of new strategic imperatives, Expand Sneaker Culture, Power Up the Portfolio, Deepen Relationship with Customers, and
As part of the ‘Power Up the Portfolio’ imperative, the company will: create more distinction among banners, including re-launching the Foot Locker brand, and transforming the company’s real estate footprint by opening new formats, shifting off-mall, and closing underperforming stores.
This will see the underperforming stores in malls shutting down and Foot Locker open new free-standing shops that will target younger customers and people who are obsessed with sneakers. The company aims to open hundreds of the new concept stores – from around 120 to more than 400 stores by 2026, Tony Aversa, senior vice president of store development at Foot Locker, said.
On whats ahead for the company, Foot Locker President and CEO Mary Dillon said, “we are proud of Foot Locker’s role in influencing and serving the global sneaker community, and next year, we will celebrate the 50th anniversary of the iconic Foot Locker brand. We are incredibly excited to introduce our “Lace Up” plan with a new set of strategic imperatives and financial objectives that are designed to set us up for success for the next 50 years.”
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