Foot Locker Is Going on a Store-Closing Frenzy — Is It Going Out of Business?

If you thought your local shopping mall’s store selection was already looking a little dull, it’s about to get even worse. On March 20, 2023, Foot Locker announced that it plans on closing over 400 stores across the U.S., which would bring its total store count in the nation to under 1,000. Could this mean Foot Locker is going out of business?

For decades, Foot Locker served as the “go-to” spot for athletic wear, sneakers, and casual sandals. But between the shift in consumer behavior and declining sales caused by the COVID-19 pandemic and inflation, the retailer has seen an drop in demand. Here’s why Foot Locker is closing its stores and what it means for the company.

Following its inception in 1974, Foot Locker became a staple in shopping malls across the nation. But, as you may already know, shopping malls aren’t performing as well as they were pre-pandemic, which has caused many stores to pull out.

Although Foot Locker isn’t going out of business, it has decided to eliminate its underperforming stores in select malls, which reportedly make up only 10 percent of its sales.

During its March 2023 Investor Day event, Foot Locker Inc. unveiled its “Lace Up” plan. One provision of the plan includes closing 400+ stores of which 25 percent are located in A and B-rated shopping malls and 50 percent are in C and D-rated malls. In addition to closing stores in the U.S., the company will also be shuttering its stores and e-commerce in Hong Kong and Macau.

Despite the bad news, Foot Locker’s Lace Up plan has a silver lining. While some Foot Locker stores will be removed from malls, this gives the company more room to focus on other areas, including expanding its sneaker culture. It also intends on diversifying its brand mix “to offer more sneaker choices and meet more occasions.”

The company will also launch some standalone stores that bear a new concept and take up far less square footage.

During the fourth quarter (2022), the company says it opened 21 new stores, remodeled or relocated 45 stores, and closed 101 stores. As of Jan. 28, 2023, the company still had 2,714 stores operating in 29 countries, including North America, Asia, Australia, Europe, and New Zealand. It also has 150 franchised stores in the Middle East and Asia.

In 2022, Nike announced that it would be taking more of a direct-to-consumer approach. That meant it would begin limiting the retailers that could sell the brand, including Foot Locker. According to Foot Locker’s March 2023 press release, however, the two have “revitalized [their] relationship.”

Despite the reconnect between Foot Locker and Nike, the footwear company says it plans on doubling its non-Nike sales between now and 2026.

In 2021, Foot Locker Inc. announced that it would be cutting its Footaction stores from its lineup of banners by 2023. Of the stores that closed, some were converted into existing banners. Because most Footaction stores were located within close proximity to some of the company’s other stores, there was some overlap between them.

As a result of the closures, the company was able to place more attention on Foot Locker, Kids Foot Locker, Champs, and Eastbay. Today, only a handful of Footaction stores remain open.

Foot Locker is owned by Foot Locker Inc., which parents a number of popular retailers including:

• Lady Foot Locker
• Kids Foot Locker
• Footaction
• Eastbay
• Champs Sports
• Runners Point
• Sidestep
• Atmos
• WSS

Through its Lace Up plan, the retailer hopes to grow its global revenue from $8.5 billion (2022) to $9.5 billion by 2026 for the following brands: Foot Locker, Kids Foot Locker, Champs Sports, WSS, and Atmos.