On Monday, Foot Locker officials announced plans to close around 400 underperforming stores by 2026, including 125 of its Champs Sports locations this year.
At an investor day in New York, Foot Locker executives announced a new business plan called “Lace Up,” aiming to reset the company. One of the significant components of this plan is the closure of more than 400 stores in shopping malls.
Tony Aversa, senior vice president of store development, said these 400 stores account for nearly 10% of Footlocker’s total sales. In North America, Foot Locker currently operates approximately 1,300 mall-based stores. The company did not announce specific stores it expects to close, but said it would be closing half of lower-performing stores in C- and D-rated malls and a quarter of stores in A- and B-rated malls so it could focus on its top-performing stores.
However, Foot Locker plans to open hundreds of new free-standing concept stores by 2026.
Foot Locker recently opened a “power store” in the Dallas area as part of its growth plans. According to Foot Locker CEO and President Mary Dillon, this store has successfully attracted an older and higher-income customer base.
During the investor day presentation, Dillon highlighted that the median household income of the Dallas store is 30% higher than Foot Locker’s average.
“So these are just a couple of examples of early wins that we’re seeing and our ability to both expand wallet share and broaden our customer reach, which gives us great confidence in our growth plans,” Dillon said during the presentation, Business Insider reported.
In addition to store closures and openings, the retailer emphasized the company’s renewed partnership with Nike. Chris Santaella, Foot Locker’s Chief Merchandising Officer, said the company plans to feature more retro Nike shoes by basketball stars LeBron James and Kevin Durant this holiday season.
Although Foot Locker reported quarterly earnings above forecasts, its sales guidance for the future was lower than expected. This news, combined with the store-closure plan, seemed to leave investors unconvinced, though — Foot Locker shares dropped more than 5% after the announcement, even as the broader stock market saw a slight uptick.