A Favorite US Shoe Retailer Plans To Close (And Open) More Stores

While the American Mall just can't catch a break in 2024, maybe specialty shoe retailers can. In 2023, Foot Locker wasn't looking too steady on its feet. In March, it announced plans to close 400 underperforming stores by 2026; all the stores slated for closure were (and are) located in malls. These shopping supercenters of yesteryear keep taking retail hits, and are increasingly failing to lure in a major demographic Foot Locker hopes to court: young shoppers with newfound purchasing power.

While Foot Locker announced shrinking its mall footprint, it also winnowed down its banners in order to focus on new store concepts. In 2023, Foot Locker also announced its "Lace Up" plan, a business directive cheekily named for the sporty slang definition of the term, in reference to getting ready to put up a fight. Part of its corporate strategy for that fight? Cutting many mall stores and multiple international operations from the Foot Locker roster.

Wildly, the fight might just work. Not because Foot Locker is slashing with integrity, per se, of course, but because the brains behind the bloodbath seem truly committed to re-upping its game, and opening 280 new stores with a whole different sole.

For its new "Lace Up" playbook, as discussed during Foot Locker's 2024 Q4 investor day events, CEO Mary Dillon outlined an annual revenue goal for the company of $9.5 billion by 2026. Closing the 400 underperforming American mall stores is on this timeline, but so is introducing a new standalone store experience that prioritizes interaction and spectacle, as well as focuses on active and fitness-forward shoppers.

Foot Locker also plans to optimize its loyalty rewards program in the near future, even if those rewards are garnered from stores focusing on a different kind of clientele. For example, 2023 saw the closure of 125 of Foot Locker's Champs stores, a chain that targets more sports-forward customers. Like in Foot Locker's pre-pandemic revitalization plans, new store concepts will be focusing on enticing more of a sneakerhead shopper than the quotidian buyer of gym shoes.

The company's new global concept is outlined as immersive, exclusive, and full of "elevated brand storytelling," per an April 2024 Foot Locker press release. What exactly does that mean? If you're not sure, you might need to ask your nearest shoe-freak friend to find out. As Dillon said in the same release: "Our new store concept cements Foot Locker's position as the leader in sneaker culture by offering an engaging, cutting-edge shopping experience for the sneaker passionate."

There's a familiar pattern at play when retail giants start to close their stores. Often when a retail chain lags behind in its earnings reports, leadership then tends to announce store closures, massive layoffs, and a half-hearted declaration of reinvestment in the brand. Sometimes, a CEO may even throw in a harebrained attempt or two to retain business. (On that note, read about Kmart closing down its last full-size store in the U.S.)

The end of this losing game is often a slog (for example, consider the story of discount retailer Big Lots and its store closures in 2024). Even the most bright-eyed of retail Hail Marys tends to end with a bankruptcy filing and/or liquidation. But every so often, there's an upset in a retailer's favor, and such might be the case with Foot Locker.

In 2024, Foot Locker enjoyed a strong fourth quarter — quite the feat, considering the brink of bankruptcy the company appeared to be teetering on in March 2023. The shoe retailer really did commit to its reinvestment plan, at least most immediately observable via its juiced-up rewards program. Yet, shuttering so many mall stores easily accessible by low- to mid-income customers seems like leaving money on the table in favor of some select sneakerhead shoppers. Many dying retailers have made a last grasp at relevancy by refocusing on the luxury market. Whether Foot Locker's play for the same is the end of the beginning for the company or the start of its comeback season still remains to be seen.