As more and more retailers take cost cutting measures in 2023, shoppers want to know if Foot Locker is closing down.
With soaring inflation and customers tightening their purse strings, 2023 is proving to be a tough year for retailers. A number of global chains such as Bed Bath & Beyond are closing stores, while other companies shutting sores include Burger King, with some Walmart stores closing too.
Now, popular sneaker retailer Foot Locker has also announced it will axing hundreds of under-performing mall stores as part of a new business plan to appeal to younger shoppers. Here's what we know about the Foot Locker store closures...
Is Footlocker closing down?
Footlocker is planning to close 400 stores by 2026 across North America. The stores earmarked for closure account for nearly 10% of Foot Locker’s total sales, according to the company's senior vice president of store development, Anthony Aversa.
Foot Locker operates more than 3,000 Foot Locker, Kids Footlocker, Champs Sports, WSS and atmos stores globally - and 125 underperforming Champs Sports stores will also be closed this year.
It comes as more than 800 stores belonging to Walmart, Gap, Bed Bath & Beyond are set to close, with America bracing itself for a mass exodus of retail stores in the coming months.
But despite widespread closures, Foot Locker also plans to open new sites as part of its business strategy going forward. The company is closing hundreds of underperforming mall-based stores, while more than 300 'new concept' stores are planned to be opened by 2026.
The new store strategy - called 'Lace Up' - aims to engage younger and more diverse customers. Foot Locker CEO Molly Dillon told analysts at an investor day in New York City: "These are the fastest-growing consumer segments in the US and are rapidly expanding in their purchase power. If you don’t win with young diverse consumers in this category, you don’t win in the long run."
Why is Foot Locker closing stores?
Foot Locker is closing stores as part of its new 'Lace Up' business plan, which aims to make the brand more relevant to younger shoppers with the opening of new concept stores.
The company described the move to analysts as a "reset", and comes amid a dip in sales. Foot Locker has reported fourth quarter sales that eased 0.3% compared to a year ago. The retailer also forecast total sales to drop by 3.5% to 5.5% in 2023.
Like many other retailers, Foot Locker has been forced to take cost-cutting measures due to high inflation and declining bottom lines as shoppers tighten their belts. The company said the 400 store closures will enable the company to focus on its better-performing stores.
Anthony Aversa said: "We will increase our square footage by 10% to over 14.5 million square feet as we open up larger, more experiential expressions of our brands with a wider product assortment. New formats will surpass 400 locations."
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