By Peter Verry
via Footwear News
Sneakers are big business, and there’s no retailer in the market more powerful than Foot Locker Inc. But analysts have been critical of the behemoth’s 2019 performance.
The New York-based firm’s most recent quarter fell short of Wall Street expectations, with profits dropping 31.8% to $60 million.
Foot Locker president and CEO Dick Johnson, however, isn’t buying into the doom and gloom market watchers are selling.
“We don’t do things for quarterly results. We invest for the long term. We are making fundamental changes to the way we do business, how we think about it and our consumers that will allow us to have a long future,” Johnson told FN. “If we get into a ‘Let’s make sure this quarter is perfect’ [mind-set], we will never make the right investments for the long term.”
Foot Locker wasted no time in 2019 providing a glimpse into what its future would look like.
At the top of the year, the retailer introduced its Power Store concept to North America, a community-focused model created to serve as a center for local culture. (Before North America, Foot Locker unveiled the format in London, Liverpool and Hong Kong.) The innovative retail experience debuted stateside in January on 8 Mile Road in Eastpointe, Mich., and the latest to open was in New York City’s Washington Heights neighborhood in August.
Johnson confirmed with FN that more will open before year’s end, including five in the U.S. and two overseas: one in Melbourne, Australia, and the other in Frankfurt, Germany.
Foot Locker’s buzziest move this year is Greenhouse, its incubator created to yield limited products with the hottest and most respected brands and designers. The first Greenhouse launch, which has not yet been announced, is slated to arrive in September.
“Immediately out of the gate, I don’t know that [Greenhouse] moves the needle that tremendously,” said Wedbush Securities analyst Christopher Svezia, “but it provides Foot Locker with the ability to look at what’s next, what can be really needle-moving, what that core consumer is looking for, how they’ll respond and react to things.”
The effort that could pay the most dividends, however, is its FLX membership program, which is driven by access and benefits rather than discounts. The program is currently being tested in Lady Foot Locker and Foot Locker Netherlands and is expected to hit the United States after the holidays.
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