Foot Locker Inc. (FL) is a sneaker and athletics apparel retailer with more than 3,100 locations in the U.S. and about two dozen other countries. While the first Foot Locker retail location opened in California in 1974, the company has a much longer history. Foot Locker is the sole remaining operating entity of the once-famous F.W. Woolworth Company, the national five-and-dime retailer that was founded in 1879. In the mid-20th century, Woolworth expanded its operations by opening a series of specialty retail shops. In the process, the company bought G.R. Kinney, a shoemaker that owned the Foot Locker brand. Over time, as Woolworth saw its flagship stores decline, the company changed its name, eventually becoming Foot Locker Inc. in 2001.
Today, Foot Locker sells athletic shoes, apparel and other goods globally for a wide range of sports. To do so, Foot Locker now operates numerous subsidiaries and brand names that specialize in various products or sports. Among these brands are Lady Foot Locker, Kids Foot Locker, and Champs Sports. In 2019, the company generated $8 billion in sales, and it currently has a market cap of $3.0 billion.
Throughout its history, Foot Locker has made a number of steps to remain competitive in the fast-changing retail landscape. These include several major acquisitions aimed at expanding into retail areas beyond its traditional brick-and-mortar format. This strategy contrasts with its former parent, Woolworth, which was not able to survive the emerging eras of big box stores and, later, e-commerce. Below, we take a look at the 4 most significant acquisitions made by Foot Locker. Note that Foot Locker does not provide annual revenue and profit figures for its subsidiaries.
- Type of Business: Sporting Goods Direct Marketing
- Acquisition Price: $146 million
- Date of Purchase: December 3, 1996 (announced)
Eastbay is a sporting goods mail-order company that sells athletic footwear, apparel, equipment and private-label merchandise for numerous sports. The company was founded in 1980, went public in 1995, and it has operated as Foot Locker’s direct mail division since 1996. Headquartered in Wausau, Wisconsin, Eastbay is among the largest direct marketers in the United States. This acquisition, made before Woolworth renamed itself, has been key to Foot Locker's success, providing an alternative network for selling its products as department stores and malls have declined.
- Type of Business: Retail Footwear and Apparel
- Acquisition Price: $225 million
- Date of Purchase: April 21, 2004 (announced)
Footaction targets the young male demographic through the offering of athletic footwear and apparel. The merchandise offered by Footaction focuses less on functionality and more on athletic style. In 2004, Foot Locker purchased approximately 350 Footaction stores from Footstar Inc., which was reorganizing in Chapter 11. Though the initial agreement to purchase the Footaction retail stores was for $160 million, Foot Locker reportedly increased its offer to $225 million in response to competing bids. The deal signaled Foot Locker's commitment to growing in the retail footwear and athletic apparel spaces. As of 2019, Foot Locker operates 250 Footaction stores, primarily in the U.S. and Puerto Rico.
Runners Point Group
- Type of Business: Retail Athletic Footwear and Apparel
- Acquisition Price: $94 million
- Date of Purchase: July 10, 2013
One of Foot Locker's most recent acquisitions is Germany-based Runners Point Group. At the time of the purchase, this specialty athletic store operated 200 stores in Germany, the Netherlands, Austria, and Switzerland. It had revenue of $250 million in 2012, the year before the acquisition. The acquired company's stores included Runners Point, Sidestep and an online subsidiary called Tredex. The acquisition bolstered Foot Locker's European sales and leveraged their digital capabilities to expand Foot Locker's e-commerce business. As of 2019, there are 107 Runners Point and 80 Sidestep stores in Europe. The former caters to running footwear and communities, and the latter is a predominantly athletic fashion footwear brand.
- Type of Business: Secondary Sneaker Marketplace
- Acquisition Price: $100 million minority investment
- Date of Purchase: February 7, 2019 (announced)
The most recent Foot Locker acquisition on our list is GOAT Group. GOAT is a managed secondary marketplace for sneakers under the GOAT and Flight Club brands. Unlike the other acquisitions, Foot Locker made a "strategic minority investment" in GOAT rather than buying the company outright. The percent of GOAT that Foot Locker owns through its $100 million investment was undisclosed. This investment also is different from the company's earlier acquisitions because of the nature of GOAT's business. As a secondary sneaker marketplace, GOAT allows Foot Locker access to a new niche market in the e-commerce. Now, Foot Locker can strengthen the value of its sneakers brands as an item for resale, not just for initial purchase. The partners say the goal is to leverage Foot Locker's global footprint and GOAT's digital capabilities to expand sales for both companies.