Foot Locker Reaffirms Outlook After Strong Q2, Set to Move Global HQ to Florida and Open Tech Hub in Dallas
In November of 2023, Foot Locker president and chief executive officer Mary Dillon unveiled what she described as the retailer’s “first imperative:” To expand sneaker culture by capitalizing on key sneaker moments and anniversaries.
But after Foot Locker’s announcement this week that it would move its corporate headquarters from New York City — a hub of sneaker and basketball culture — to St. Petersburg, Fla. by 2025, some analysts are questioning if this goal is still within reach for the retailer on the upswing.
“Expanding sneaker culture from St. Pete rather than NYC?,” Williams Trading analyst Sam Poser titled his skeptical Aug. 28 note to investors. “We think not.” Poser added that while the move will help cut costs, it will likely make it more difficult for Foot Locker to attract qualified candidates for roles. (Foot Locker said it will not force relocations but did not give insight into what teams would be transferred and how the process would unfold).
From Foot Locker’s perspective, the move will help cut costs, and the company says it will drive collaboration among teams in a location where many employees are already based. As for New York, Dillon said the retailer will maintain a smaller presence in the city to keep it “connected to sneaker culture and basketball culture.”
“St. Petersburg has always been a center of gravity for the company,” Dillon told FN in an interview . “Champs is headquartered there. We have a large center of gravity with executives already there across many of our commercial functions. And so for us, it’s an opportunity to bring together more of our team in one place, to drive more collaboration across the business.”
In addition to announcing the HQ move, Foot Locker also announced the upcoming opening of its Global Technology Services (GTS) Hub in Dallas, which will serve as the heart of the retailer’s tech capabilities and innovations.
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Proximity to New York City isn’t necessarily the winning ingredient for top sneaker retailers, Spurwink River advisor Matt Powell pointed out. He gave the example of two successful JD Sports-owned sneaker retailers — Finish Line and Hibbett Sports — both of which are based outside of New York, in Indiana and Alabama, respectively.
“From a [sneaker culture] perspective, I don’t think will be a big deal,” Powell said of Foot Locker’s move. “The business is global today, with new ideas and trend emerging from all over the place.”
According to Jane Hali & Associates analyst Jessica Ramirez, the issue of moving the headquarters to Florida has less to do with losing the connection to the sneaker community, and more to do with the impact it may have on company culture if teams get separated and are no longer all working together.
“When you do these abrupt changes, it does affect the culture of the company,” Ramirez said. She cited VF Corp.’s move of its global headquarters to Denver from Greensboro, N.C. five years ago. (VF’s North Face and Altra brands are housed in Colorado, while Timberland stayed in Stratham, N.H., and Vans remained in Costa Mesa, Calif.)
“When VF moved them, it kind of destroyed the culture,” Ramirez said. “And that has been part of the downfall.”
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