STORE OBSERVATIONS:
1. Hibbett Sports and City Gear have serious inventory issues. One City Gear store’s Jordan Brand wall was one of the worst things I’ve ever seen for a chain with an account in good standing with Nike. It’s not just one store either. Almost every store has a shortage of Nike inventory. This is directly related to supply chain issues, but it’s reinforced by the move of City Gear from Memphis to Birmingham. The stores are still performing fairly well because of apparel and the consumers who patronize the stores in this area continue to be a moat for Hibbett Sports. Inventory issues are affecting all stores, but an issue I discussed in another part of this report is rearing its head. The District Manager had to fire an entire management staff at a location here in the city. The coveted releases that are showing up at retail are being hidden and sold by the staff. The in-demand product doesn’t even make it to the wall. This diminishes consumer loyalty and creates division between the management and their staff. As word spreads about the problems it reflects poorly on Hibbett/City Gear. What can you expect when a store gets shoes that are reselling for 3 Times as much in many cases?
2. Foot Locker Stores, specifically Champs is a waste land. The Nike section is sparse. It’s the same situation at the House of Hoops location, which typically has an abundance of Jordan Brand and Nike Basketball (retro included). There is so much redundancy in shoes being displayed, employees are having to get super creative… which leads me to the new DM. She easily has the toughest job of any District Manager in the country. She’s had to remove a long time employee for the same sneaker issues at Hibbett Sports. This created a shift in personnel. That shift was handled masterfully while entire stores were redesigned to remove the appearance of empty shelves. She has orchestrated some masterful merchandising with a team of women managers who execute quickly. Kudos to the team at Footlocker on that. The negative of FootLocker isn’t a regional issue, it’s the consistent issues with the FLX App. On one of the biggest releases of the year, the app went down for hours causing people to miss their opportunity to grab the Jordan 4 Retro University Blue. The raffle system and the app has limited a lot of the issues for FootLocker managers. It’s only when the shoes aren’t picked up, or are shipped late, that problems occur. FootLocker has done a good job of re-raffling shoes. When the shoes aren’t on a raffle, individual stores have to resort to additional methods to make sure the everyday consumer can get coveted shoes. Resellers visit the store daily looking for Dunks and Jordan 1s. They arrive with two to three people in tow, to get as many pairs as possible. This makes it nearly impossible for an average consumer to luck up on shoes when they are placed on the wall.
3. Finish Line/JD Sports remains the store with the most selection of footwear. The store consistently has a unique product mix at their flagship and the cubes (brand apparel sections) creates some great funnel lines, but it does cause some siteline issues. The good thing is, in small stores a sales lead can patrol each section. Finish Line at smaller stores fulfill so many orders online that it looks like there isn’t inventory in some issues, but that’s because they have a robust stock locator system.
4. I visited Jimmy Jazz in Senatobia. It’s one of the few stores where I walked in and there were Jordan 1s still on the shelves. While I was there they were purchased, but still their implementation of their new App for hyped releases is clearly helping to move a consumer who isn’t digital into the online experience. Also Jimmy Jazz has done an amazing job of keeping their employees. Many of the people who worked for the previous Okuns chain are still with the company. Nike should be happy about this consistency. Jimmy Jazz stores are also low on inventory, but the layout of the store hides their issues a bit better than the other chains. I have to wonder how long can Jimmy Jazz last though. They are basically the last small-big chain remaining. Here is my big prediction for Jimmy Jazz, FootLocker will be looking to acquire the chain soon.
5. I visited the Nike Clearance Store a few times in the late afternoons. The long lines are gone, but there is still quality product and the checkout lines consistently have 20 people in them. The Nike Factory Store is the same way. Nike could add another Nike Store in the east part of Memphis and that store would easily be a multimillion dollar shop. Remember when I said the FootLocker DM has the hardest job in the country? I meant that for every store in this region. Every store has to have a unique apparel selection because The Nike Employee Store remains a thorn in the side of retail in this region as the store was flooded with new release footwear. The morning line at opening wraps around the building with 50-100 people each day. Those lines get smaller throughout the day, but at any time there are always 20+ people in the store. How do stores barely getting product compete? Apparel. Here is the difficult conversation. Memphis is almost 70% Black. If this city was primarily White, the sneaker chain stores here would all fold. This is the uncomfortable truth, Black folks like to look good. These companies can thank their lucky stars that this seemingly stereotyped statement isn’t a stereotype. When a major portion of the city is connected to someone who has Nike Employee Store access, stores can only rely on apparel to match the shoe options. I have to assume this is a lot like stores not in majority Black cities. On almost a daily basis you can find someone with a shoe bought at a Nike store from this region carrying a shoe with them to match apparel at one of the stores listed above.
Note: The stimulus money is creating a seller’s market. Even with the limited amount of product in stores, people are still shopping.