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Despite beating Q3 2022 performance expectations, Matthew Kish reports that Foot Locker is looking to close 400 stores by 2026 as reported during the company’s Q4 2022 Investor Day event.
The move is all part of Foot Locker’s “Lace Up” strategy that was introduced in the company’s Investor Day Event. According to CEO Mary Dillion, Lace Up will “set [Foot Locker] up for success for the next 50 years.” As a part of the “Lace Up” plan, the company is looking to address four key points.
- Expand Sneaker Culture
- Power Up the Portfolio
- Deepen [Their] Relationship With Customers
- Be Best-in-Class Omni
The first prong of the Lace Up plan is to “serve more sneaker occasions, provide more choice, and drive greater distinction.” Essentially, this means giving consumers more options to choose from when it comes to purchasing footwear. The “Power Up the Portfolio” initiative will see the Foot Locker brand “transforming the company’s real estate footprint by opening new formats, shifting off-mall, and closing underperforming stores.” As for the other two points in this “Lace Up” plan, the company is looking to “elevate the customer relationship” and “improve customer experience online” by changing the brand’s loyalty program and making the online shopping experience better for customers.
It’s important to note that while Foot Locker will be closing locations, the majority of the 400 stores that will be phased out are underperforming in favor of “new formats” that fall more closely in line with the company’s Lace Up initiative. There will likely still be new stores opened and remodelings of existing locations. According to Matthew Kish, “the company seems pleased” with new stores like the recently opened Fort Worth location which includes an indoor basketball court, treadmills, and a different design concept, compared to previously opened locations.
Foot Locker is placing a big bet on its new strategy in the hopes that it can keep up with its competition. In connection with its new strategic direction, Foot Locker is targeting a 5-6% total sales growth through 2026. Only time will tell if the move will pay dividends.