Most Recent Articles In Business
Latest Business Articles
- Adidas Shares Up on Reebok Sale Rumors
- VF Net Up 8.5% in Q3
- Insiders Mixed on Holiday Footwear Prospects
More Articles By
NEW YORK — Ken Hicks, Foot Locker’s new chairman and CEO, walked the floor of the retailer’s flagship store in Manhattan last Monday like a beloved populist, shaking hands with sales associates, doling out compliments and asking about hot-selling kicks.
But what he really wanted to do was draw attention to the company’s merchandising strategy, which has been revamped after relying for decades on basketball shoes. Now, running sneakers will get their share of the spotlight, Hicks said. So will apparel. It’s a sweeping plan that is beginning to unfold, as evidenced by the prominent, upfront displays of footwear by Asics, New Balance and Nike, and the color-coordinated outfits of footwear and apparel throughout the 34th Street store.
Since taking over for longtime chief Matt Serra, who retired in January, Hicks — who joined last August as president and CEO, after leaving the No. 2 post at JCPenney — has put the company on a new path. Much like it’s flagship, other stores will press deeper into the running, toning and skating categories, as well as significantly boost their mix of branded and private-label athletic apparel.
The sharpened focus was triggered, in part, by the recession, which both altered consumers’ thirst for pricey kicks and sped up the decline in the basketball business.
What’s more, Hicks, 57, said he believes the company had offered too much of the same product across its banners, which include Foot Locker, Lady Foot Locker, Kids Foot Locker, Footaction, Champs, Eastbay and CCS.
His move to differentiate the mix is part of a larger, five-year plan — which Hicks unveiled in detail at Foot Locker’s investor conference on Tuesday — to boost annual sales at the 3,500-door chain to $6 billion, from $4.9 billion in 2009, and to raise sales per square foot to $400, from $333 last year.
To get there, Hicks said, the company will tweak the merchandise, in addition to growing its international store base by 50 percent, primarily in Europe.
But hitting those targets won’t be easy.
“It’s a big stretch,” said Sam Poser, an analyst at Sterne Agee. “They can change the assortment easily over time, but the problem is that they have to get permission from the consumer to be something different. They’ve been too associated with basketball. To do that, they’ll need to spend a lot of money on updating their stores and separating each banner. They’re doing the right thing, but it will take until late next year and a lot of money to execute the whole thing.”
Still, Hicks said that by expanding into more categories and calling on more brands, the goals are “realistic and achievable.”
Here, the CEO tells Footwear News in an exclusive interview how he plans to do it.
FN: You’re about to unleash an aggressive five-year plan. What’s the major focus?
KH: Our goal is to be the leading global retailer of athletically inspired shoes and apparel. We want to be a leader, and to do that, we have to improve our performance and make sure we do better at the things that count: growing sales, increasing profitability, making sure we’re taking care of our customers by converting higher, taking care of our associates so they’re inspired to engage the customer and give them an exciting experience. Globally, we’re one of the few U.S. retailers that has been successful in Europe, Canada, Australia and New Zealand. We’ll continue to build on that in those markets and will look at other markets.
FN: How will the Foot Locker structure change?
KH: You’ll know what Foot Locker Inc. is because it will have a number of highly differentiated banners that address certain customer segments. ... Instead of everything being moved together, which is what happened during the downturn, we’re going to make things stand on their own. [Each banner] will have its own customer and capability.