NeydtStock/Depositphotos.com
March 5, 2025
Foot Locker To Refresh 300 Stores, Open 80 Reimagined Concept Locations in 2025
Foot Locker is making a serious investment in terms of a turnaround effort, as reported by Retail Dive, with the company set to refresh 300 stores and open 80 reimagined concept locations over the course of 2025.
During a March 5 earnings call delivering mixed results, CEO Mary Dillon outlined a plan to intensify efforts surrounding its “reimagined” store concept. This news comes as Foot Locker reported total sales volume ticking downward by 5.8% year-over-year while comparable sales trended upward by 2.6%, according to a company press release. Gross margin improved by 300 basis points as compared to last year, and net income from continuing operations rested at $55, a sizable improvement over the year prior’s net loss totaling $389 million.
Foot Locker also indicated it had completed 160 store refreshes during the quarter. By the end of 2025, the company will have renovated 800 stores over a two-and-a-half year time frame.
“As we reflect on 2024, I’m proud of the progress we’ve made with our Lace Up Plan in what’s proven to be a dynamic consumer and category backdrop. During the year, we achieved some important financial milestones, including a return to positive enterprise comp sales growth, gross margin expansion, and positive free cash flow, all of which we expect to continue into 2025. Similarly, through our continued execution of the Lace Up Plan, we made significant progress in 2024, and we’ll look to build upon these efforts in 2025,” Dillon said during the earnings call.
“First, in stores, we’re upgrading our customers’ experience through both our new Reimagine concept and extensive Store Refresh program, both of which remain an important part of our plans looking ahead, which I’ll speak to in a few minutes. We now have eight Reimagined doors open across North America, Europe, and Asia. The response to our Reimagined doors has been extremely positive from our customers, our brand partners, and our landlords, and we’re accelerating our focus on Reimagined as part of our efforts in 2025,” she continued.
Foot Locker Plans To Close 400 Mall Stores, Exit Markets as Part of Refocusing Strategy
As Retail Dive senior editor Cara Salpini detailed, a large portion of Foot Locker’s turnaround gameplan is centered around a tightening of operations, refocusing on key markets where performance and outperformance is possible.
Part of that strategy: shutter less-than-desirable mall locations.
The company plans to close about 400 mall-based Foot Locker locations, with the goal being a “tighter, stronger store base, with reduced exposure to lower-tier malls,” according to Dillon.
Foot Locker currently boasts 20 points more penetration in A and B malls than it did in 2019 — as CFO Mike Baughn mentioned during the call — when it first kicked off the process of exiting underperforming malls.
A second prong of the retailer’s strategy is aimed at the continued exit from international markets. A separate August 2024 Retail Dive report outlined that Foot Locker had plans to completely wind down operations in Denmark, Norway, Sweden, and South Korea by mid-2025.
Tariff Exposure: Foot Locker Sees Challenges, but Exposure Is Modest
Concerning the topic that nearly everyone has top of mind at this point in time — that of President Donald Trump’s imposed tariffs — Foot Locker execs gestured toward challenges ahead but emphasized that they were not insurmountable.
Baughn indicated that Foot Locker did source some of its products from China but also that these products represented only single-digit percentages of the company’s overall inventory. Dillon, on the other hand, zeroed in on macroeconomic concerns shared by members of their core customer demographic regarding the ongoing tariffs.
“Our customers are young — by definition they’re more limited in their discretionary budgets,” Dillon said.
“This is for sure a category that they prioritize in their lives, but we’re watching as they’re thinking about overall cost of living, plus some uncertainty about tariffs,” she added.
Discussion Questions
Will Foot Locker’s refocused efforts on its reimagined stores and reduction of underperforming mall locations create successes for the company in the near future?
Will President Trump’s tariffs have any noticeable impact on Foot Locker’s fortunes in the immediate future? What can the company do to navigate past or through this headwind?
What can Foot Locker do to further differentiate itself in an increasingly cramped footwear and athleticwear segment?
Poll
Loading …BrainTrust
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Ananda Chakravarty
Vice President, Research at IDC
Frank Margolis
Executive Director, Growth Marketing & Business Development, Toshiba Global Commerce Solutions
Recent Discussions
More Discussions
Will an In-Store Retail Tech ‘Confidence Gap’ Create Winners and Losers?
A new survey suggests that in-store retail tech could be a major factor in retailer success…Walmart’s Next CEO Era: From McMillon to Furner
Walmart CEO Doug McMillon will soon be replaced by John Furner. What’s next for the retailer?Which Brands Are Missing the Boat on Advent Calendars?
Advent calendars appear to be trending upward in popularity, with potential to move to other holidays…
Sneaker shopping lends itself very well to a more immersive, experiential retail experience. If FL creates an engaging – and not gimmicky – experience, I believe this will bode well for their sales.
Foot Locker needs to step up its efforts in stores and it needs to get back to being a focal point for sneaker culture. This helps with that.
These improvements to the store are important, and may be necessary if our promised tariffs make sneakers less affordable.
Foot Locker was smart to invest in their stores, and I suspect the ROI is clearly seen in improved in-store conversion rates, compared to the older-type stores. However, given the current state of geopolitical affairs, Foot Locker – and most other retailers – are going to stuffer from the tariff impact, it’s only a question of by how much. Tariffs will have a double-whammy effect on both store traffic and shopper conversion rates: Store traffic declines because fewer people feel like shopping (can you blame them?); Conversion rates drop because people who do actually visit the stores, discover higher prices and leave without buying – you can clearly see this in lower conversion rates.
If there was ever a time for all retailers to deliver the very best customer experience for shoppers who visit their physical stores, it’s now.
The comps are interesting, being something of a reverse of the more common overall rising/same-store declining; superficially it looks encouraging, but as is the case with macy*s, if the increases in same stores have been influenced by directing resources there, perhaps the results are actually underwhelming (that would be the negative take…not sure we should rush to go there).
Overall this sounds like a very “Retail 101” strategy: close the laggards and invest in the strong spots; not terribly creative, but really what else could be tried?
Optimizing store performance and reducing operational costs could lead to increased profitability at Foot Locker.
With reimagined stores and a focus on high-performing locations, the company may experience an increase in sales and customer loyalty.
In the end, however, financial success depends on how effectively these initiatives are executed and how consumers react to them.
Leaning into the sneaker culture will certainly help Foot Locker. This is where they’ll find some of their most loyal and most valuable customers. These are also where they’ll find the influencers who in this market, are essential to brand success. If they can create engaging experiences for these folks in the store, and based on what they were showing at NRF, it looks fantastic, I think this will be a big win for them.
Refresh and Reimagine. It’s a Retail 101 headline we need to be reading about a whole bunch of retailers. And we should have been reading that headline a whole lot sooner. but better late than never. When Foot Locker says they will close 400 unproductive mall stores, that would suggest that the closing process long overdue. But again, better late than never. Bottom line, “Refresh and Reimagine” has to be table stakes these days.
I don’t know what the numbers are, but I suspect that the fashion and everyday use trends of the sneaker market are not conducive to what FL has to offer.
Some of FL’s moves are justified- for instance having a mall with two Foot Locker stores, a Foot Locker Kids and a Champs store. That’s a lot of real estate for sneakers. The Nike DTC impact was a push that was unforeseen, but has already shifted and recovery is now dependent on bringing in profitable foot traffic. Nike aficionados were not the focus and FL still offered some brands. The typical store is well stocked with Reeboks, Adidas, Puma and more. The reimagined version of FL will have immediate value, and become more attractive during year round sports as well as a desire for style. I suspect this move will be an uptick for FL.
Foot Locker’s store refresh and “Reimagined” concept is a good start, but design alone won’t drive long-term success.
These spaces need to become community hubs, sneaker events, athlete meetups, and exclusive product drops. That’s how you drive foot traffic and loyalty.
When it comes to tariffs, the bigger challenge is their young customers’ limited budgets. Foot Locker can navigate this by offering flexible payment options, value-driven bundles, and membership programs with real perks.
Foot Locker must offer more than just products, it should become a hub for culture, community, and exclusivity.