Athletic-gear retail chain Foot Locker Inc. has revived its decades-long relationship with Nike Inc. to focus on basketball and sneaker culture and cultivating the next generation of sneaker enthusiasts, which is something that executives said could start to pay off later this year.
The remarks were made at an investor presentation after Foot Locker FL, reported a weaker outlook, as retailers deal with more muted demand for goods amid recession worries and rising prices for necessities that have slowed consumer spending.
In recent years, both companies have tried to be less dependent on each other for sales. Foot Locker pitched the partnership as complementary to Nike's NKE, trying to sell more shoes and other gear directly to consumers via online sales and its own stores, and to harness better market planning, loyalty and data. Foot Locker said that Nike is expected to make up 55% to 60% of the chain's revenue in 2026. That would be less than 70% of sales in previous years. Foot Locker Chief Executive Mary Dillon said during the presentation that the fruits of our renewed commitment to one another will begin to show up in holiday this year as we build increasing momentum to 2024 in the 50th anniversary of Foot Locker. She said that they are partnering across planning and loyalty to develop an integrated marketplace. The revitalized alignment has positioned Nike and Foot Locker to return to growth in 2024. She said that Foot Locker would highlight LeBron and KD retro shoes, along with LeBron signature shows and Air Force 1 offerings. She said that both companies would partner on an exclusive product concept celebrating Foot Locker's 50 year anniversary next year. Nike last year struggled with a staggered supply chain and efforts to cut prices and unload off-season clothing. The shoe maker's quarterly results in December were better than expected. On Tuesday, Nike reported third-quarter earnings. On Monday, Foot Locker's shares fell 5.7%, while Nike's shares fell 0.7%. Foot Locker stock has gone up 28.5% over the past 12 months, while Nike has gained 3.6%. The S&P 500 Index SPX fell 11.4% over the period.