Trainer chain Foot Locker is seeing sales and margins fall: the retailer had to allow bigger discounts to price-sensitive consumers. Store closures are also having a detrimental effect on results.
Promotions weigh on figures
Foot Locker, a giant with more than 2,600 stores in 26 countries all over the world, saw its sales fall by almost 10 % last quarter and posted a loss of 5 million dollars (4.6 million euros). To entice price-sensitive consumers, the chain was forced to focus more on discounts and promotions, which weigh on its results. As part of a restructuring plan, the chain also closed 108 shops, while only fifteen new ones opened.
The retailer is therefore lowering expectations for the remainder of the year and cutting its dividend to free up funds for strategic investments, which is not falling well with investors. Foot Locker’s poor figures also reflect negatively on some of the other big players in the trainer market, such as Nike, Adidas and Puma, which, after all, depend on the big sports retailer for part of their sales.
