A famous shoe company is now exiting several countries following a year and a half with more sales declines than increases.
Foot Locker reported a return to growth in the second quarter, with sales increasing by 2% to $1.9 billion, as noted in a company press release.
The retailer also achieved comparable sales growth of 2.6% year over year and expanded its gross margin by 50 basis points.
However, the company announced plans to close its stores and e-commerce operations in South Korea, Denmark, Norway, and Sweden by mid-2025.
Additionally, Foot Locker will transfer its operations in Greece and Romania to the licensing company Fourlis Group, resulting in the closure or transfer of 30 stores overall.
In a bid to cut costs, Foot Locker will move its headquarters from New York City to St. Petersburg, Florida, by late 2025.
This relocation aims to enhance collaboration among teams and leverage Foot Locker’s established presence in St. Petersburg, which previously housed Champs Sports’ headquarters.
CEO Mary Dillon assured that the company would maintain a presence in New York and would not require employees to relocate.
The exit from several international markets is part of Foot Locker’s strategy to streamline its business.
Earlier, the company announced plans to close 400 stores by 2026, wind down its Sidestep and Eastbay brands, abandon a planned expansion into Japan, and end two European joint ventures.
However, the partnership with Fourlis Group will enable Foot Locker to focus on expanding in Southeast Europe, with plans to open 100 new stores in the region in the coming years.
Foot Locker continues to invest in its existing locations, introducing new store concepts that have proven successful.
The retailer is accelerating the opening of three additional stores of this new format, bringing the total to eight planned for 2024.
These revamped stores are seeing higher conversion rates and larger basket sizes.
In the recent quarter, Foot Locker completed 67 store refreshes, aiming to revamp two-thirds of its Foot Locker and Kids Foot Locker stores by 2025.
These updated locations are outperforming the overall chain in terms of comparable sales and gross margin.
The company also launched a revamped flagship store in New York earlier this month.
Currently, the new formats account for 17% of Foot Locker’s global square footage, with a target of reaching 20% by 2026, per Retail Dive.
Despite these improvements, Foot Locker’s net loss widened from $5 million to $12 million, attributed to the costs related to its turnaround efforts.
GlobalData Managing Director Neil Saunders pointed out that this temporary setback is necessary for future advancement.
He praised Dillon and her team for proactively addressing challenges and noted that early signs of improvement are emerging, particularly in store performance.
Saunders emphasized that Foot Locker’s broader and more balanced sneaker assortment and investment in store experiences are critical for maintaining its market leadership.
He added that enhancing store environments will likely strengthen relationships with key brands like Nike, especially as the retail landscape continues to evolve.
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Other Economy News Today
A massive rental company with 34k locations now shuts down its operations after filing for bankruptcy and 22 years in business.
Users of movie rental company Redbox were left saddened after it was announced that it would be shutting down operations.
The announcement comes after the rental company’s parent company, Chicken Soup for the Soul Entertainment, filed for Chapter 11 bankruptcy.
According to court documents obtained by the Washington Post, the Connecticut-based company claimed to be one billion dollars in debt.
As a result, Redbox, which was a staple of many grocery stores including Walgreens, and CVS will be shuttered.
Many fans took to social media to express how upset they were with the loss.
“I knew it was coming, sadly,” UltraVada wrote in a post on X, formerly Twitter.
“It was inevitable,” a second person mourned.
“I knew this would happen when I heard they filed for Bankruptcy but its still sad to hear. I have a lot of fun memories of Redbox,” a third person lamented.
“I still don’t think this will be or ever be the end of physical media as we do still get remasters of some movies in 4k/Bluray.”
One person revealed that they had forgotten the rental service had existed.
Some users were not surprised by the announcement.
“Not surprised since nobody really rents videos anymore with the rise of streaming and what not,” one user admitted.
“Also kinda remember getting into a feud with them on here.”
One user also pointed out that the last remaining Blockbuster, located in Bend, Oregon, managed to outlive Redbox.
Redbox was acquired by Chicken Soup for the Soul Entertainment (CSSE) in 2022 and became one of the company’s flagship video-on-demand streaming services.
At its peak, CSSE operated more than 20,000 DVD rental kiosks across the country.
The company’s filing means that the company’s more than 1,000 employees will be laid off, per The Wall Street Journal.
It was also reported by Deadline that many employees at CSSE hadn’t received their paychecks and had medical benefits cut in late June.
Also Read: This Massive Mall Retailer Is Now Closing In California
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