New York-based Foot Locker looks to move be­yond sneak­ers

China Daily (USA) - - BUSINESS - By ASSOCIATED PRESS in New York

Start with the shoes but move on from there — that’s the plan at Foot Locker Inc.

Long known for its sneak­ers, the com­pany is re­or­ga­niz­ing its stores to fur­ther high­light top brands, des­ig­nat­ing ar­eas to show­case trends, and adding more dis­plays of full sports gear to en­cour­age broader shop­ping.

At the chain’s re­designed mid­town Man­hat­tan flag­ship in New York that opened Tues­day, large dig­i­tal signs dis­play images of the shoes as well as so­cial feeds like Twit­ter that men­tion the brand.

Larger ar­eas are de­voted to big brands like Puma and Un­der Ar­mour. A sec­tion in its store is de­voted to show­cas­ing emerg­ing fash­ions for women. And next to the store, there’s an ex­pe­ri­en­tial area called NYC33 with a sep­a­rate en­trance that will host fash­ion shows and show­case other events and launches.

“Sneak­ers drive the ap­parel that goes with them,” says Foot Locker CEO and Pres­i­dent Dick John­son. With all the other ar­eas, the 13,000square-foot store near Macy’s stocks about 50,000 sneak­ers for men, women and kids at any given time.

The New York-based chain, which op­er­ates more than 3,400 stores un­der its own name as well as FootAc­tion, Champs Sports, Lady Foot Locker and the new women’s SIX:02 among oth­ers, has ben­e­fited from the pop­u­lar­ity of ath­letic sports­wear for life be­yond the gym.

It’s aim­ing to push an­nual sales to $10 bil­lion through 2020 from last year’s $7.4 bil­lion— in part by cater­ing bet­ter to fe­male cus­tomers. That all starts with sneak­ers, which rep­re­sent about 80 per­cent of men’s sales and 75 per­cent of the women’s business.

Even with the liq­ui­da­tion of Sports Au­thor­ity and its 500 stores, the field is a com­pet­i­tive one. Tra­di­tional ri­vals like Fin­ish Line and Dick’s Sport­ingGoods re­main, while Lu­l­ule­mon is ex­pand­ing to new ar­eas like swimwear and menswear and its own sup­pli­ers like Un­der Ar­mour and Nike are open­ing more stand­alone stores.

Nike’s store at The Grove in Los Angeles fea­tures a Michael Jor­dan ex­pe­ri­ence area where cus­tomers can test prod­ucts through a dig­i­tally in­ter­ac­tive drib­bling drill that lasts 23 sec­onds, a trib­ute to the ath­lete’s jersey num­ber.

Un­der Ar­mour is set to open a big store on Man­hat­tan’s Fifth Av­enue on the site of the for­mer FAO Sch­warz store. It also penned a deal with depart­ment store chain Kohl’s to sup­ply its cloth­ing and ac­ces­sories across all the stores.

“This is not a fad,” says an­a­lyst Matt Pow­ell of the NPD Group, a lead­ing global in­for­ma­tion com­pany. He fur­ther says the ath­letic sports­wear and footwear in­dus­try Dick John­son, en­joyed one of its best years in 2015. It’s about a $70-bil­lion mar­ket, di­vided evenly be­tween footwear and clothes. Ath­letic footwear sales in­creased by a mid-teen per­cent­age last year.

John­son says the newly de­signed store is im­por­tant to sep­a­rate it­self from the com­pe­ti­tion and get its mes­sage out in New York, the epi­cen­ter of sneaker cul­ture.

Among some of the hot sneak­ers: Adi­das Pure Boost, the Stephen Curry shoe by Un­der Ar­mor, and Nike Air’s Huararaches.

“We re­al­ized long time ago that we couldn’t be ev­ery­thing to ev­ery­body’’ in one store, said John­son. “We have de­fin­i­tive brands and ex­pe­ri­ences.”

The in­tent of the NYC33 area, for ex­am­ple, is not to sell stuff but to ex­cite the cus­tomer.

From Tues­day to Sept 25, Foot Locker will stage fash­ion shows in that space high­light­ing singer Ri­hanna’s newFenty col­lec­tion for Puma that in­cludes $600 capes and $200 sweat­shirts.

The line is ex­clu­sive to Foot Locker’s SIX:02 shop-with­in­shop and Bergdorf Good­man for 24 hours be­fore dis­tri­bu­tion goes wide Wed­nes­day. The store also marks the de­but of an area called The Col­lec­tion at SIX:02 that serves as a kind of lab that show­cases emerg­ing fash­ions for women.

“I’m ex­cited about the new ap­proaches” at the store, Pow­ell said. “They have all the dif­fer­ent brands and so many dif­fer­ent looks for the con­sumer.”

In its most re­cent quar­ter, Foot Locker’s key rev­enue mea­sure was up 4.7 per­cent, and prof­its rose nearly 7 per­cent. In con­trast, its ri­val Fin­ish Line an­nounced this year that it would close 150 stores and re­place its CEO. In the first quar­ter, the com­pany’s prof­its dropped 30 per­cent.

Foot Locker hadn’t al­ways been a strong per­former. When for­mer CEO Ken Hicks took over in 2009, the com­pany was in a sales funk and he started clos­ing stores.

Hicks also started adding spe­cialty de­part­ments like Puma Labs, which of­fers ex­clu­sive mer­chan­dise, and House of Hoops, ded­i­cated to high-end bas­ket­ball shoes and gear. And Foot Locker, which never fo­cused on cater­ing to the spe­cific shop­ping needs of women un­til a few years ago, is putting a lot of fo­cus on that now.

It has 30 stand-alone SIX:02 stores, tar­get­ing a trendy cus­tomer in her late 20s, and the newly re­designed Foot Locker store has de­voted a bou­tique un­der the ban­ner.

The com­pany has grad­u­ally been clos­ing its Lady Foot Locker stores and has ap­prox­i­mately 140 now, which John­son says is about right.

It’s us­ing Lady Foot Locker to tar­get a younger cus­tomer than SIX:02 — ages 14 to 25, with more tra­di­tional sports­wear like Nike and Adi­das.

Foot Locker still has most of its stores in malls, but John­son said he’s not con­cerned about Macy’s and other mall an­chors clos­ing lo­ca­tions.

“We’re one of the few places in the mall that peo­ple line up for,” he said.

Sneak­ers drive the ap­parel that goes with them.” and pres­i­dent Foot Locker CEO

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