Sportswear and footwear retailer Foot Locker will exit several markets in Asia and Europe by mid-2025 as part of its ongoing reinvention plan.
The company has announced the planned closures of all stores and e-commerce operations in South Korea, Denmark, Norway, and Sweden, as well as the transfer of operations in Greece and Romania to retail group Fourlis.
The actions will affect 30 of the company’s 140 stores in Asia Pacific and 629 stores in Europe. The retailer said these are part of its ‘Lace Up Plan’ to simplify the business model and focus on core banners and regions.
The retailer previously announced it would shutter 400 stores by 2026 and wind down its Sidestep and Eastbay businesses. As of August 3, the company operated 2464 stores in 26 countries, as well as 213 licensed stores in the Middle East and Asia.
In addition, the company will move its global headquarters from New York to St Petersburg, Florida in late next year to “further support strategic progress”.
The news came as Foot Locker reported a 1.9 per cent uplift in sales to $1.9 billion for the second quarter, with comparable sales also up 2.6 per cent. However, its net loss widened to $12 million from $5 million last year.
The growth in comparable sales ended the six-quarter streak of decline, with CEO Mary Dillon attributing this to the ongoing Lace Up Plan.
Compared to the same period in 2019, the company’s sales are up 6.9 per cent, but according to GlobalData MD Neil Saunders, it is still underperforming compared to the wider market.
“A lot of the gains made during the pandemic and its aftermath have been undone by a couple of years of torrid trading,” Saunders continued. “Foot Locker is still in the early days of a recovery from this period.”
The analyst cited several headwinds facing the retailer, including the fading of sneaker culture and the more cautious consumers spending less on footwear. He also praised Dillon and her team for their efforts to cope with the issues, such as repairing the relationship with Nike and investing more in the customer proposition.
Regarding the Lace Up Plan, Saunders believes it will take a while to deliver, but there have been more tangible signs of an improvement. The decision to invest in stores is also sensible, and the latest shop formats create a more engaging and interesting experience, he added.
For the full year, the company expects comparable sales to increase by 1-3 per cent, which Saunders described as “reasonable but modest”.
“Nevertheless, it is a step in the right direction and suggests that Foot Locker is positioning itself for stronger gains as it enters the next fiscal year and beyond,” the analyst concluded.
