Speaking at the Citi Global Consumer Conference, Ken Hicks, Foot Locker, Inc.'s chairman, president and CEO, said the company's long-struggles reaching women is partly an industry issue rather than a company-specific one. He said, “As an industry, we approach women as men with long hair, and we did not look at them the way we should have.”
An extensive study compiled by Foot Locker showed that one change needed was the Foot Locker had to approach women first through apparel. Added Hicks, “Women start from the apparel down. Men start from the shoes up. And so we have got to step up our apparel business and make that a much stronger business. And so we are changing that.”
Fit was also found to be the single most important attribute for woman when buying a garment and they grew frustrated as some of the company's vendors were changing their fit every year. Finally, the coordination of colors between shoes and apparel were seen as particularly important for the gender. Said Hicks, “If purple is the color, she wants a touch of purple through it. She doesn't want to look like Barney, but she would like to have it. And we buy pink bottoms and blue tops and purple shoes and say, 'Well, the guys dress like that.' Yes, but the woman wants to look put together.”
As a result of the learnings, Foot Locker is testing new presentations in stores, including featuring more apparel overall in Lady Foot Locker but also including bra and bottom bars in most of its stores. Said Hicks of the bars program, “We have had good success with that, focusing on Nike and they have been a tremendous partner there.” Hicks is also exploring the possibility of a “whole new format” to reach women.
At its annual investor meeting in early March, women's along with athletic apparel, kids, and team was identified one of the four areas that had the potential to generate an additional $100 million in sales. At the meeting, Foot Locker's management spelled out several strategies to accelerate its growth as part of a five-year goal of reaching $7.5 billion in sales by 2016. In 2011, Foot Locker’s revenues reached $5.62 billion.
What enthused Hicks particularly about the women's opportunity is that no other retailer is doing a good job reaching them, including Lululemon.
“The thing about Lululemon, women aren't happy with it. In fact, they aren't happy with anybody,” said Hicks “The people who did the research for us said this is the only business they have ever seen where nobody was doing well.”
Regarding Lululemon, he said, “It is not that they don't like the product. They hate the prices and say this is way too expensive for what it is. Women recognize that.”
He expects Foot Locker to better connect with the athletic women through its strong brand selections. Said Hicks, “We are sitting here with some great brands like Nike and Adidas, which interestingly enough, they are middle-priced. This is the only place where Nike is middle-priced in the world. And so we feel we have got great opportunity there.”
Regarding the overall strong trend toward athletic footwear, Hicks said while it's being supported by fascination around lightweight running, it's not cyclical but a long-term trend. Millennials are wearing sneakers “all the time” and will continue to do so as they age.
He elaborated, “All you have to do is look out on the street and see what people are wearing on their feet. And by the way, if you guys had the chance, every one of you would have worn sneakers in here today. And 10 years from now, I guarantee you you will. Because people like me will be dead and there will be new people in and everybody will be wearing sneakers and jeans. That is the trend.”
He added “As the brands come out with terrific product, particularly the whole lightweight idea, which makes the shoes even more wearable, it raises that angle on that trend.”
On Europe, Hicks noted that despite the region's economic struggles, Foot Locker still sees “significant opportunities” for growth in several counties where it has little penetration, citing Poland, Czech Republic and Turkey. France and Germany are also seen as underdeveloped. Italy is also opening up more shopping centers to open up additional opportunities for Foot Locker mall concepts to complement its street stores. He added, “Europe we will figure this out. We are going to be a major player. Last time Europe slowed down, we stopped and it took us a number of years to recover. We are going to continue to position ourselves so when they come out of it, we will be the strongest player in our space, because there is no other pan-European athletic apparel or shoe retailer out there.”
