Foot Locker to close 117 stores, cut 120 jobs
In a move to cut costs, Foot Locker Inc. is closing 117 underperforming stores and trimming about 120 jobs this quarter, the retailer said Friday.
Spokesman Peter Brown declined to provide details on which locations would be affected but said a large percentage were Foot Locker and Lady Foot Locker stores in the United States. Some have already been closed; the rest are expected to shut by the end of the month, when the company’s fiscal year ends.
The closures will help the specialty athletic retailer, which operates about 3,600 stores in 21 countries, become more efficient, said Tom Shaw, a lifestyle analyst at Stifel, Nicolaus & Co.
“The whole company in one mall could have a Foot Locker, a Lady Foot Locker, a Kids Foot Locker, a Footaction and a Champs,” Shaw said. “Our concern is there’s a lot of blurring of lines; there’s not a distinctive message.”
On Friday, Foot Locker said the 117 closures would bring its total number of shuttered locations to about 190 for fiscal 2009.
The retailer also will consolidate some management teams to “allow us to sharpen our focus on the female consumer, as we look to improve the coordination of our women’s merchandise assortments and marketing strategies across each of our Foot Locker brands,” Chief Executive Ken C. Hicks said in a statement.
The New York company said the reorganization and job cuts -- taken from home office and field management positions -- would save about $10 million in the upcoming fiscal year.
The moves were described by Foot Locker as the “initial steps” of a comprehensive strategic plan to be announced later this year.
Analysts said they saw opportunity for further improvements.
“There’s clearly lots of low-hanging fruit and cost-cutting that they can still do,” said Sam Poser, a footwear analyst at Sterne Agee.
With mall traffic down and consumers spending frugally, many chains have taken measures to trim expenses. In addition to being hurt by the economic downturn, Foot Locker may also be suffering from changing consumer tastes for shoes, analysts said.
For the third quarter, which ended Oct. 31, the company reported a $6-million loss and said sales fell 7.3% to $1.2 billion compared with the same period a year earlier.
Shares of Foot Locker rose 43 cents, or 3.6%, to $12.25 on Friday.
Earlier this week, department store giant Macy’s Inc. announced that it would close five stores. No California locations were affected.
