Dive Brief:
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After opening 6 power store locations in 2019, Foot Locker plans to open 20 more of the store format in 2020 across the U.S. and internationally, CEO Dick Johnson said on a conference call with analysts.
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He also noted that the company is planning to remodel or relocate 125 stores, 110 of which will be at the retailer's core store locations. The athletics brand also plans to open 65 new stores in 2020 and close 150 globally, impacting mostly Foot Locker U.S. and Europe, as well as Runners Point.
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The details come after a press release earlier this month revealed that the company would spend $275 million to invest in stores, digital and upgrades to its supply chain. Chief Financial Officer Lauren Peters said on the call that $150 million will go toward improving Foot Locker's store fleet in 2020.
Dive Insight:
Foot Locker is going all-in on store improvements in 2020. Executives talked about creating more power stores — a concept described as a "hub for local sneaker culture, art, music and sports" when it was first introduced — and renovating its current fleet.
"Our community-based power stores which feature hyper-local assortments and activations have been well received," Johnson said on the call. "We intend to build on that strength over the next several years."
The next power store location, a concept that focuses on building community, will open at the American Dream mall in New Jersey, Johnson added. A focus on local stores has swept across retail, with Foot Locker brand partner Nike focusing on local communities through its Nike Live concept, and Sephora announcing a store expansion aimed at opening stores in local geographies.
"We see significant potential to take [the power store concept] further across the geographies and also to put some of those elements back into stores that we would consider core," Peters said, hinting that this would be part of the remodels at core locations.
Johnson also noted that Foot Locker is planning to invest in locations for female customers. Currently, Foot Locker has 17 "elevated" women's stores across Europe and 34 in the U.S., with plans to scale that to 40 to 50 new locations globally.
For the fourth quarter, the athletics retailer announced net income of $141 million, a decrease of 10.8% from the prior year, and net sales of $2.22 billion, compared to $2.27 billion in the year-ago quarter. For the fiscal year, net sales crossed $8 billion for the first time, executives said, and net income fell from $541 million to $498 million.
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