Foot Locker Back in With Nike, Closing Stores and Underperforming Brands

eCommerce and Retail Talk
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There are four things going on here:

  • Nike and FootLocker has revitalized their partnership and Nike merchandise should start appearing again in Footlocker stores around Christmas.

  • Footlocker is closing the Lady Footlocker, Footaction and Eastbay brands in North America.

  • Footlocker is closing 400 stores in class C and D malls.

  • The company is focused on developing a store of the future concept which will launch in New York City in 2024.

My take on this?

First, I wasn’t even obvious to me that Lady Footlocker and Footaction were still viable brands in North America to begin with. What were they doing still around?

As far as malls are concerned, same thing.

Why is Footlocker still in all these old C and D malls which are declining and lost their anchors?

I just getting the feeling that Footlocker went through a major strategic planning effort and some of these items should have been completed 5 years ago.

I’m worried that Footlocker is going to launch in New York City. How is that a scalable “store of the future”? NYC is such a unique market compared to the rest of America.

In the long-term, I worry a little about Footlocker and think it could get more pressure from players like Dick’s Sporting Goods in particular – they seem like a better-run company to me at the moment.

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If FootLocker had good advisors, it would not enter cities in which Nike has retail locations, Cities like New York, San Francisco etc Foot Locker need to be selective in how they look for real estate.

Nike and FootLoker have also most probably realized that CAC is not coming down, and thus their partnership benefits both parties by keeping costs lower. It also feels like an over-correction by Nike leadership (John Donahoe and co), which alienated long-standing retail partners with their DTC strategy.

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I remember as a teenager walking through Foot Locker in the mall checking out the new shoes. How both Nike and Foot Locker ever decided it was a good idea to have a shoe store without the greatest sneaker brand in America is a little puzzling.

Though it sounded from the past like the DTC push by Nike was overdone.

It’s almost like January 2020 was the exact worst time to hire John Donahoe as CEO of Nike, from a current environment point of view. It could be difficult to unwind.