Why Foot Locker Reigns Supreme in the Athletic Retail Market

On Tuesday, Nov. 29, Footwear News will host its 2016 Achievement Awards in New York, honoring the best and brightest in the industry, including Company of the Year winner Foot Locker Inc. Read on to learn more about the retailer’s accomplishments.

In the midst of a retail environment marred by volatility and an increasingly demanding digital evolution, Foot Locker Inc. remains unstoppable.

Among its 2016 highlights: $5.7 billion in revenues year-to-date, enormous digital growth, the unveiling of a revamped flagship store in New York City and buzzy moments with stars such as Rihanna, DJ Khaled, Stephen Curry and Victor Cruz.

While the chain’s current successes seem anomalous in the current retail landscape, the cornerstone of Foot Locker’s winning formula isn’t incredibly complicated.

Chairman and CEO Dick Johnson — who has been at the helm for roughly two years — said the company’s secret sauce is an unparalleled and unwavering connection to the consumer.

“I’m most proud of our consistency,” Johnson said, reflecting on the firm’s hot streak. “We’ve got a great environment and great connectivity with the consumer. And when you throw in our partnerships with brands and vendors, it gives us that stick-to- itiveness with consumers.”

Indeed, one of the company’s talents is an ability to stay on pace and in sync with all of its core customers, across a portfolio of 3,400 stores under nine banners, including Lady Foot Locker, Champs Sports, Six:02 and Footaction.

“This is the difference: We don’t speak to the consumer, we speak with them,” explained Jake Jacobs, EVP and CEO for North America. “It’s a subtle difference, but it’s very true — we try to be there with our consumers and provide those experiences that are part of their everyday lives.”

Foot Locker’s reputation for resonating with its constituents has landed the company some of the industry’s most exclusive product launches and partnerships. (It’s also helped it earn back-to-back Company of the Year honors.)

For instance, in September, Puma chose Foot Locker’s women’s concept, Six:02, for an exclusive day-early launch of the Fenty Puma by Rihanna collection in Los Angeles and New York. And this month, the chain rolled out several exclusives for its fifth annual Week of Greatness promotion, including one iteration of the Nike Zoom KD9.

Under Armour chairman and CEO Kevin Plank said he views shelf space in Foot Locker as a rite of passage to success in the athletic realm. “If you’re going to win in our industry,” Plank said, “you have to win in Foot Locker.”

He added that Foot Locker — which has a presence in nearly two dozen countries — represents a strategic growth platform, as well as access to a highly sought-after demographic. “Scale is Foot Locker’s No. 1 strength,” Plank said. “As we think strategically as a company, we see lots of opportunity in Foot Locker to [help us] build on the success we’ve had in North America and take that globally.”

It makes sense, then, that international expansion — particularly in Europe — remains a priority for the New York-based athletic chain.

However, that doesn’t mean Johnson and his team have slowed down on the home front. In August, Foot Locker unveiled the redesigned 34th Street flagship, spanning nearly 10,000 square feet. True to its customer-centric approach, the new Manhattan store is organized largely by brand, rather than by product category, to enhance the shopping experience. Shop-in-shops in the space include Puma Lab, Nike Inc.’s House of Hoops and Adidas’ newly launched concept, The Foundation.

Adidas Group North America president Mark King said he’s banking on that dedicated space as an avenue for growth. “[The Foundation] brings the best of Adidas — from running, basketball and Originals — to the Foot Locker consumer in a premium branded space,” King said. “We have worked together to capitalize on key franchises, while still bringing newness of product in a more frequent way to consumers.”

For his part, Johnson said he views the flagship as a new way of doing business. “We’ve had brand shops in some of our stores, but on 34th Street, we’ve taken a stand with some of our key partners and created great spaces that allow us to tell stories that our consumers are connecting with,” he said.

While the flagship takes things to new heights, Elliot Hill, Nike’s president of geographies and sales, said Foot Locker stores have been a game changer for the brand. “From the first House of Hoops 10 years ago to our portfolio of 300-plus doors across multiple concepts worldwide, Foot Locker is always willing to collaborate on concepts that elevate the consumer experience and move the industry forward,” Hill said. “It takes excellent leadership, company-wide alignment with the long-term vision and passionate talent at every level of their organization.”

With another blockbuster year in the books, Foot Locker’s management said the next phase hinges on driving consistent results across brick-and-mortar and digital. A major catalyst could be the company’s launch reservation system, which debuted this year and will roll out in more markets before the holidays.

Johnson said he hopes this technology will help the retailer strengthen its bond with sneaker lovers. “We’re making a lot of progress, but this race will never be won because the consumer will always demand more,” said the CEO. “But we want to be in a position where, when the consumer chooses to interact with us, we’re ready.”

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