Analysts at Susquehanna Financial Group downgraded Foot Locker’s stock on Friday.
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I made an unofficial visit to a number of stores last week including several Foot Locker locations. This was not commissioned by the store. I simply wanted to see if my theory is correct in regard to reselling sneakers. I have been stating that resale is dead from non-factory or outlet stores. Ten years ago the margins in resale were much bigger. Just four years ago resale still took place out of mainstream retail outlets. This enabled me to actually visit a Foot Locker, buy Curry 3s and resale them at a considerable profit margin.
In the post above written in 2016, as StockX and GOAT became major players in the third party marketplace, I spent over 200,000 dollars at Foot Locker. The years prior to StockX and GOAT (2010-2015) I easily spent over 300,000 a year at Foot Locker.
Inside of the Foot Locker app you can see how much you’ve purchased in the last year. I’ve spent 5,018.00 dollars with Foot Locker and not much more with Champs and Footaction. Why is this important? When I decided to visit the Foot Locker locations last week at the start of 2020, I was confirming a very important issue for StockX, GOAT and every third party selling platform in the sneaker industry. Resale is slowing down. The reasons are plenty, but this post isn’t really about resale. It’s about the questions I asked the managers and sales leads. One of those questions derived from a visit to an “urban” sneaker store where I noticed that the apparel inside of the store was primarily made for men. When I visited the Foot Locker stores I realized a similar problem.
The question I raised was , “How many sales do you think you’re losing by not catering to women shoppers?”
I think this question was easily the most profound question born from my visiting a variety of store locations. What struck me as really interesting was a comment from the manager. She said, “We got rid of This is an opportunity for urban and traditional stores too soon.” That statement created a flurry of thoughts. In 2018 I wrote a post about the “Rise” of women’s footwear initiatives:
In this post I made this statement:
College enrollment numbers always swing towards women. There are more women getting educated than guys. This switch in college enrollment has created a more empowered woman. Those women are now unafraid to wear their fitness apparel out in public from the Yoga mat to the store. Casual Friday is now a place where women look just as at home in a pair of Stan Smiths and a blazer with denim as they did wearing power suits. The white sneaker isn’t just a guys closet staple anymore.
The discussion in that post was about Nike and adidas all basically creating marketing campaigns saying they were catering to women, instead of actually catering to women in sportswear. Urban accounts, as well as mainstream retail in particular Foot Locker locations, carry ZERO items of apparel for women. A few years ago $FTL utilized a metric called hook-ups for their sales teams. This meant that a person buying a pair of kicks should also be buying a tee shirt or pants in their purchase.
If Nike has placed an “emphasis” on women and Puma did so with Fenty and adidas is about to lean heavy into women’s wear with Ivy Park and Beyonce, where will the Foot Locker locations display women’s apparel? They have yet to create a section with tees and apparel for women. They have a shoe wall for women, but that’s it. There isn’t any opportunity for hook-ups… and if you notice the source article for this post Susquehanna recently downgraded $FTL stock because they are “losing market share to other chains.”
One of the sales leads said, “If we just carried some women’s tights we could sell them and it would help us sell more shoes.” I asked where are women buying, although I knew the answer. Here in Memphis a new Lululemon store opened next to an Apple store. The store is an experiential destination. That store is disrupting women’s sneaker retail. Kohl’s, Ross and Marshalls are all disrupting sneaker retail and Nike’s Factory and Clearance stores are major destinations for women looking for sports apparel. In the mall locations women don’t even waste time looking for sportswear.
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When Foot Locker closed This is an opportunity for urban and traditional stores I stated that it was a smart move because women are better shoppers than men. That line of thinking is dead wrong now. Women are still value shoppers in general, but they are also very knowledgeable about what they are buying and they are buying more sneakers than at anytime than I’ve witnessed in the last 14 years. I’ve long stated that sneaker retail chose to gear everything towards youth culture in particular young men and this has been detrimental. Foot Locker had the answer years ago with LFL and with SIX:02, but the company doesn’t need to go completely retro and open new locations. From the mouths of their own employees, they need to give the stores at least a small allotment of women’s apparel and expand the women’s section. If the chain is losing ground they only have to look at what they were to correct the issues.
