Foot Locker CEO Ken Hicks announced his intent to retire from the specialty athletic retailer, and his second in command, Richard (Dick) A. Johnson, currently the company’s chief operating officer will step into his role.
Shares of the retailer dropped by as much as 7 percent to $52.25 on the news.
Hicks, 61, will relinquish his post this Dec. 1, but will stay on as executive chairman of the board through Foot Locker’s annual shareholder meeting in May 2015, still participating in the daily operations for a smooth transition.
Nicholas DiPaolo, lead director of the company’s board of directors, said, “When Ken joined Foot Locker over five years ago, we discussed the Company’s key priorities – establishing a plan for strong, sustainable growth that leverages Foot Locker’s exceptional position in the market and developing the next generation of leaders, including ensuring an orderly CEO succession process. Ken has delivered exceptionally well on these and all fronts, and we are grateful to him.”
Since Hicks joined Foot Locker in 2009, the company has seen dramatic gains in sales and overall growth. In 2013, sales increased to $6.5 billion from $4.9 billion in 2009. In that same time frame, earnings before interest and taxes have grown to 10.4% of sales up from 2.8%, and net income grew to 6.6% of sales from 1.8 percent five years ago.
Hicks cut Foot Locker’s store count and consolidated management across its Foot Locker, Lady Foot Locker, Kids Foot Locker and Footaction stores in an effort to revive the brand at a time when sneakers were second-string to casual shoes. Demand for athletic wear—and shoes—has since grown, and Foot Locker posted a 39 percent increase in net income to $92 million for its second quarter ended Aug. 2, 2014.
“It has been an honor to lead Foot Locker, and the Company’s performance is the direct result of the work of an exceptional team at all levels of the organization. I am very proud of what we have accomplished together, including that we will soon report on our 19th consecutive quarter of strong sales and profit growth,” Hicks said. “And we believe we have robust potential for continued success due to the strength of our brand banners, the innovation delivered to us by our vendor partners, the loyalty of our customers and the spirit of our associates. As we look ahead, the Company is positioned to benefit enormously from Dick’s clear vision and great talent in all areas that are integral to long-term growth. I look forward to seeing Foot Locker achieve its next level of success with Dick as its leader.”
Johnson, 56, has been with Foot Locker since 1997, and came over from Eastbay when the company acquired it that year. He served as executive vice president and group president of retail stores, among other leadership roles. Johnson assumed the COO position in 2012 and has played a key role in developing the company’s long-range strategic plan, and led the acquisition and integration of Runners Point in Germany.