After two years of declining revenue and profit, the American footwear retailer Foot Locker appears to be progressing on its turnaround plan, dubbed Lace Up, with its launch last week of the first “store of the future” at Willowbrook Mall in Wayne, New Jersey. The concept will serve as a model for the company’s future store renovations and expansions and features a distinct storefront and in-store environment, expanded footwear and accessory selections, an emphasis on sustainability, dynamic digital fixtures and other technological advances.Other highlights include a modern and streamlined shopping journey, exclusive product releases, an area for communal sneaker try-on, and a hub for customization and personalized experiences.“Our new store concept cements Foot Locker’s position as the leader in sneaker culture by offering an engaging, cutting-edge shopping experience for the sneaker passionate,” Foot Locker’s president and CEO Mary Dillon stated in a press release.  “As we continue progressing against our Lace Up Plan, this inventive retail experience delivers on our promise to power up the portfolio, while providing an unparalleled, omni-focused customer experience.” The Lace Up Plan, which Dillon originally announced last March, will involve maximizing Foot Locker’s loyalty program, investing in technology to enhance the customer journey and diversifying its brand portfolio. With the plan in place, Foot Locker has stated that it expects to grow its business to over $9.5 billion in annual revenue by 2028. What inspired Foot Locker’s revamp?Originally founded in 1974, Foot Locker has approximately 2500 retail stores in 26 countries across North America, Europe, Asia, Australia, and New Zealand, and has a licensed store presence in the Middle East and Asia.However, in recent years, the sneaker brand has faced financial difficulties amid diminished consumer discretionary spending and increased competition from newer footwear brands like On, Hoka and Kizik. On March 6, Foot Locker Inc reported that full-year sales in FY23, ending on February 3, were $8.15 billion, down from $8.75 billion in FY22.  Will Foot Locker’s remodeling efforts prove fruitful? Considering that Foot Locker currently draws approximately 80 per cent of its revenue from its physical locations, it makes sense that the company would prioritize updating its store design. Managing director and retail analyst at GlobalData Neil Saunders told Inside Retail that the retailer’s “store of the future” concept doesn’t solve all of Foot Locker’s problems, but it is a very good start at remedying some of the ills that have plagued the brand.“The refresh also brings Foot Locker into line with other retailers,” Saunders said. “The bar for store design has been set far higher thanks to companies like Lululemon or Vuori, and even Dick’s is investing more in its stores – especially the new House of Sport locations. Its commitment to updating 900 shops shows that Foot Locker does not want to be left behind.“I think the plans will also help CEO Mary Dillon, as they are solid evidence to investors that things are changing. Foot Locker has had a string of very bad numbers so Wall Street is now keen to see signs of material change,” he concluded.Marie Driscoll, an expert on luxury retail and the founder and chief analyst at Driscoll Advisors, welcomed the retailer’s efforts to elevate its stores.  “Foot Locker sits at the heart of sneaker culture and to maintain and solidify this position, it needs to address today’s and tomorrow’s consumer and how they discover, shop and buy,” she said. “A global refresh program will address about two-thirds of the global Foot Locker and Kids Foot Locker store fleet for the next two years, elevating the brand experience and creating consistency across the brand.”However, Driscoll pointed out that it won’t be an easy road ahead for the footwear retailer.“These efforts along with a tough retail environment of higher interest rates than we’ve experienced in more than a decade, impacting both businesses and consumers via inflation and higher borrowing costs have pushed out Foot Locker’s timing to achieve its 8.5 percent to 9 per cent operating margin target by two years, to 2028. This year they see margin pressure reflecting ongoing investments in technology, digital and brand building. Despite disappointing some investors, Foot Locker is thinking long term and these strategies address the continued opportunities of the sneaker market,” she said.In an era of growing competition from newer brands like Hoka and On, established players like Foot Locker need to stay on top of their game to hold on to consumers’ attention.As Liza Amlani, principal and co-founder of Retail Strategy Group, pointed out, “The sneaker industry has lost a lot of its luster. Brands like Nike and Under Armour are overstocked with SKUs, and Adidas would have had a rough year if it wasn’t for the Samba. “The hype around exclusivity and limited editions is not as exciting for consumers, and it will take a lot more than just the product to persuade shoppers to buy. Retailers like Foot Locker have the upper hand if they reimagine the physical store as a destination for innovative and exciting experiences vs focusing on pushing a handful of brands. It’s all about the customer and getting them to spend time in your store.”