Last year I was extremely high on Foot Locker and their stock as well as their ability to cope with the growing push of DTC by Nike and the shifting loyalty of buyers to adidas. I discussed that here:
The above article was written almost a year ago in November. At that point back to school sales had ended and the market was entering the holiday season. It was a perfect time to be Foot Locker. Jordan was dropping the Space Jam pack, adidas was launching more BOOST products and Foot Locker online was doing very well. Then “promo” season began. Nike didn’t drop an All Star Pack. NBA basketball was no longer a promotional force and premium basketball sales continued to tank. There wasn’t any excitement about Nike products. Analyst said this was a fashion issue, but it wasn’t. Nike simply failed to give people what they wanted holding on to items like Flyknit Racers and failing to create a better Roshe. It was more complicated than this, but I’m sure you get where I’m going. adidas was being conservative with their growth and managing it very well, but Foot Locker is primarily in urban areas and BOOST doesn’t sell in the hood.
My point… I wrote the posts below before the recent quarterly report that has caused this current 20% drop in share price, which I actually predicted against the higher expectations of the market. This article also includes a link to a post I wrote after tax season in response to NPD’s Matt Powell who said that sales were sluggish due to late tax returns:
It took almost a year for Foot Locker to be affected by a shifting digital environment and it’s own willingness to stimulate sales via discounting. Foot Locker doesn’t have a choice as its stores overlap considerably with urban stores like DTLR, Jimmy Jazz and City Gear. (Something no one ever talks about – Shoutout Detroit Bear on Twitter for reminding me of overlap.) The smaller chains have been doing ridiculous promos for almost three years, but because they are private the market doesn’t pay attention. I do because I sell shoes on the grey market. I have a direct relationship to what is happening that informs me at a different level than the data from analyst. The things happening to Foot Locker happened to me first as I was one of the biggest resellers in the country. While I saw the shift happening, my dependence on Amazon and things beyond my control shattered my business over the course of a year and a half.
I tried to write Foot Locker and other companies to talk with them as a consultant, but this site and my words carry very little weight. People brought in heavy hitters with “data”. Maybe now people will take the time to read a bit closer and listen to me.
What a difference a year makes, but I knew this already. In the words of my Memphis Grizzlies Coach Fizz, “Take that for data.”