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Foot Locker Looks to Women’s, Kids’ and Digital for Future Growth

President and CEO of Foot Locker, Inc. Richard Johnson and other members of the company’s senior management team set goals for the company’s long-term financial performance for 2015-2020 during an investor meeting on Monday.

Five years ago, Foot Locker first outlined their strategic vision of being the leading global retailer of athletically inspired shoes and apparel. In 2012, the company updated its priorities and its elevated long-term financial goals. Foot Locker’s new long-range financial objectives for 2020 include: sales of $10 billion, sales per gross Square foot of $600, and an EBIT margin of 12.5%.

“Setting new targets is easy. Reaching those new targets is not,” Johnson quipped.

To get there, the company’s plan for the future rests on five pillars: Kids’, Europe, Apparel, Digital and Women’s. For the kids’ business, Foot Locker wants to develop their global business and leverage their strength in running, basketball, classic shoes, and apparel. Driving a full-family experience by connecting with parents and kids in stores and online is also on the agenda. Jake Jacobs, president and CEO of Foot Locker, North America said, “[Content] is equally important if not more important to these young kids. These kids are between the ages of 4 and 11 years old, and connectivity, to them, is just a natural part of their life.”

In terms of European expansion, Foot Locker intends to spread the Foot Locker banner, as well as Runners Point and Sidestep brands, and build capability for digital growth. They will also leverage the strength they have across many categories: running, basketball, women’s, kids, casual, and apparel. One way to do this is promoting sneaker releases. “One of the things that’s different in Europe than the U.S. is there’s not a real sneaker launch culture in Europe,” Johnson said. “We’re working hard to create that.”

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To build their apparel penetration, the company’s key plans include enhancing banner segmentation, strengthening capabilities by investing in design and innovation, and improving presentation across the fleet and displaying full brand stories. Johnson said, “We used to sell apparel stacked up on tables and priced at 4 for $25 or 5 for $25 and just let it fly out the door. We’ve changed our mindset, we’re in the process of making sure that everything we do on the apparel side has a premium bent to it.”

The focus on apparel will be especially strong in the women’s business, where the clothing market has been very hot, especially in bottoms. Lauren Peters, executive vice president and CFO, said, “It is not a fad. We know she will remain serious about fitness.” Other tactics include developing SIX:02 into the primary women’s brand and strengthening it, as well as building women’s apparel through vendor partnerships.

Finally, Foot Locker intends to be where the consumers are and plans to build a powerful digital business by creating a more engaging experience, by meeting customer needs, and by investing in technology.

Compared to the company’s 2012-2016 plan, Johnson said the brand is more dynamic and communicative than they had once been. He noted that one major area of improvement has been communication between stores and websites. “We know that our customer has become fairly channel agnostic. We want to create an engagement with our consumers at any point in the day or night, or anytime they want to think about sneakers or about Foot Locker,” he said. president and CEO Dowe Tillema added, “My estimates right now are that by 2017, 2018, close to 90 percent of our traffic is [going] be comprised of a combination of mobile and tablets, so it’s a pretty big deal.”