Footwear retailer Foot Locker (FL) will close 400 stores, representing 10% of the chain’s sales, in an attempt to simplify its operations and revitalize its brand.
The announcement comes as the store reported lower earnings and forecast sales would drop this year. The retailer reported nearly $2.34 billion in sales, down 0.3% from a year ago, and forecast sales to drop 3.5% to 5.5% in 2023. However, Foot Locker reported a profit for the holiday sales quarter of $19 million, at $0.20 a share, though that was down from $103 million in profits a year ago.
It will also open new concept retail locations in an effort to relaunch its brand. On its earnings call, Foot Locker CEO Mary Dillon said the retail chain was working on revitalizing its partnership with Nike. She also noted remote work was keeping the demand for comfort wear high and that the store closures would be replaced by new concept stores designed to attract new, younger customers.
“These are the fastest-growing consumer segments in the US and are rapidly expanding in their purchase power,” she said. “If you don’t win with young diverse consumers in this category, you don’t win in the long run.”