34

EXECUTIVE INTERVIEW

35

EXECUTIVE INTERVIEW

Best foot forward

Foot Locker is expanding into new markets and the entire industry is set to benefit.

IMAGES JOHN ROELAND

Name Lew KimbleCompany Foot Locker InternationalPosition Executive Vice President & CEOHQ Vianen, NetherlandsEmployees 9,000

For Lew Kimble, Executive Vice President and CEO of Foot Locker International, the focus is clear: grow the company and grow the athletic industry. Not that Foot Locker isn’t already a giant — with more than 3,400 stores across the world, it is the leading global retailer of athletic footwear and apparel. In Europe alone, the

company has huge reach, with more than 800 stores across nineteen countries.

However, there are key markets which until now have remained untapped. “If you read Nike’s information, or Adidas’, there are big opportunities in Asia, in places like South Korea, China, Japan, Malaysia, and the Philippines,” says Lew. “This is a whole region where the athletic industry has seen success, but Foot Locker hasn’t yet played in that area.”

“Likewise Latin America has also seen lot of success in the athletic industry — particularly when you consider the World Cup and now the Olympics being held in Brazil. So although not all of those areas will work for Foot Locker in

As featured in The CEO MagazineFor more info visit theceomagazine.com

ONE ON ONE WITH BRANSON ON HIS PRIVATE ISLAND

“A BUSINESS IS SIMPLY AN IDEA TO MAKE OTHER PEOPLES’ LIVES BETTER.

36

EXECUTIVE INTERVIEW

the near term, there are still clearly some opportunities there when we look at our ability to take advantage of the things we can bring to the consumer in those regions that aren’t available today. It is a chance for us to look at where else we can grow going forward.”

Ironically, one of the things that has perhaps hindered this growth is actually one of Foot Locker’s best assets: it always puts the consumer first. What this means is that it tailors its offering to each market. “We are very fortunate to have a strong leadership group, as well as terrific associates throughout the business. That means we can adapt and be successful in various local markets. We bring in the essence of what Foot Locker means, but at the same time we work very hard at being culturally relevant,” Lew explains. “If you take Europe as an example, there is a consistency with certain products in the stores, the service we generate through our associates, and how we connect through e-commerce or digitally, but there is also a local market relevance. There are particular products that are relevant in the UK, and different products that are relevant in Italy. Sometimes, from a retail perspective, it’s easy to convince yourself that you are better than you are and think that, because you have a footprint that works in one country, you can just simply drop that footprint everywhere else and force your way into the market.

“At Foot Locker, we are confident in our abilities, and have a belief in what we’re doing, but at the same time we realise that we serve the consumer. That means we have to be open to what their various needs are. I believe that, when you look regionally, our expertise and ability to adapt to the local marketplace will allow us to successfully go into

these other places in the world. It is not that we haven’t looked there before — we have, we just haven’t done what we had to do to make it actually happen from that standpoint.”

Lew says that Foot Locker will need to leverage all of its expertise no matter which market it looks to next — whether it is China, Singapore, or South America. He has seen the challenges first hand, even in Europe, where different countries have differences in laws, labour requirements, and business operating principles. “I know there will be challenges and I think that one of

the reasons why we haven’t gone there yet is that, although we continue to evaluate possibilities, we haven’t felt confident that we can deliver what we expect to deliver to both the consumer and our shareholders. However, with my appointment and the shift of focus back on international business, the expectation from our shareholders and our board is that we figure out how to unlock some of those opportunities,” Lew says.

Even though it clearly sees its target market as teenage males, one of the areas where Foot Locker has seen

“We bring in the essence of what Foot Locker means but at the same time we work very hard at being culturally relevant in the local market.” – Lew Kimble

38

EXECUTIVE INTERVIEW

success is its push into the younger children’s market with the launch of Kids Foot Locker. “Our footprint in Europe is growing — we’ll finish this year with about twenty-five-to-thirty kids stores in Europe, and our goal is to be aggressive in continuing to grow the kids business. That is one of our seven key strategies globally — to continue to grow our kids business.” Kids Foot Locker has been particularly well received in the UK, with stores now open

in Stratford, Manchester, Glasgow, and Birmingham.

Lew has also seen growth in the women’s footwear and sports apparel markets. “When we talk about expansion,” Lew says, “there are a couple of ways to do it. The obvious way is opening new stores, but expansion also causes a growth of your base business and your ability to increase comparable store sales. What most analysts judge us on, as a retailer, is how our like-for-like — or comparable

store — results are. We will continue to have strong growth in our core business, which is men’s footwear — predominantly running and basketball — but we are also focused very much on women and kids and we are seeing a strong uptake in both.

“The womens market specifically, is an industry phenomenon right now, and across the EU most of our retail competitors are focused on womens; and so are our major brand partners. This is because women have really adopted athletic footwear as part of their everyday wardrobe, and they are becoming increasingly involved in sports.”

Lew says that one of the biggest growth opportunities for the womens range is running, which is increasingly becoming part of their workout routine. They might not do it every day, but will perhaps run twice a week and take classes the other two days. “Ten years ago we used to joke that if you were walking around in a capital city anywhere in Europe, and you saw a woman with athletic footwear on, she was an American on vacation,” he says. “But the reality now is that you see women in all age groups and with all fashion inf luences accepting athletic footwear as part of their wardrobe. It’s not that they have given up high heels, boots, or sandals, but sports shoes are readily acceptable as a comfortable and stylish way to go out about town; whether it’s

“The womens market specifically is an industry phenomenon right now and across the EU most of our retail competitors are focused on womens; and so are our major brand partners.” – Lew Kimble

EXECUTIVE INTERVIEW

40

EXECUTIVE INTERVIEW

commuting to work, going shopping, or wearing them to the gym. So I think the focus on womens and kids will continue to be strong.”

Like the athletes that it serves, Foot Locker enjoys competition. Lew believes that a strong athletic industry benefits everyone. “We respect our competitors,” he says, “and we are not embarrassed to say that they do some things better than us, and that we clearly look at what they do. The good news about retail is that you can’t hide anything. You are not in a secret laboratory coming up with a brilliant plan that is suddenly released to the world. The reality is that if you are going to be successful, everyone has to see it.

“I think we are all students of the business, so we spend a lot of time in the marketplace looking at not only what we were doing and evaluating how well we execute it, but also looking at what our competitors do. I think that, like anything — whether it is sports or whether it is business — competition should make you stronger. We are fortunate that we have internationally, as well as within each country, some strong competitors that we continue to look at and learn from.

“On the other side of the coin, of course, we want to win so we continue to drive ourselves to make sure that we look at the things that are important to us as a business. One of our core drivers is that we expect to be better than the competition: we don’t show up to lose, we show up to win. However, at the same time we are respectful of who we are competing and partnering with.

“When we talk about our vendors, the idea is to have a partnership. There is no advantage for us to be in a confrontational situation with any of our suppliers. We want to be in a positive scenario where we look for

opportunities where it is a win-win for them and for us. There will be times when we disagree or we have different agendas, but there has to be plenty of times where we intersect and have a chance to grow together.”

Lew says the ultimate goal is for the athletic industry to grow, so if Foot Locker is one of the largest players from a retail perspective and it partners with the biggest athletic brands in the world, it moves the whole athletic industry up and everybody can take advantage of what

is going on. “If the issue is you are just trading share, then ultimately there is no win in that game because eventually you will end up losing share as well. Basically, if the pie gets bigger it is better that you get a bigger slice of the bigger pie because if the pie gets smaller, even a bigger slice will still be relatively smaller.”

Foot Locker’s leading position in the athletic industry was underlined when The Federation of the European Sporting Goods Industry (FESI) approved Foot Locker Europe as the

first retailer to join the organisation; Lew now serves on the FESI Board. Founded in the early 1960s, FESI is the representative body for the sporting goods sector in Europe and engages with European political institutions, authorities, and stakeholders in the athletic industry. Until Foot Locker’s acceptance, membership had been limited to sporting goods manufacturers and national associations.

Foot Locker has posted strong results in both 2014 and 2015, and looks to have another good year in 2016. Lew attributes this to its strong supplier partnerships with leading brands like Nike and Adidas, and is happy that this growth has also grown the athletic industry as a whole.

“Obviously we hope that we benefit more than everyone else, but at the end of the day, the athletic industry has to grow, because if the industry shrinks then we are all going to lose,” he says. “Right now on Oxford Street, there are 17- or 18-year-olds walking around with £100 in their pocket and the question is: Are they going to buy a pair of athletic shoes? Are they going to go into Zara? Or are they going to the Apple store? Where are they going to spend that cash? As an athletic industry we want to win together with our vendors and hopefully take our share of what that consumer has to spend because of the innovation around the product we deliver, and also because of the exciting environment they can buy the product in.”

“Obviously we hope that we benefit more than somebody else but at the end of the day, the industry has to grow, because if the industry shrinks then ultimately we are all going to lose.” – Lew Kimble

O F M A K I N G A N YT O W N Y O U R T O W N .

T H E N E W E R A ® 9 F I F T Y ® O R I G I N A L F I T S N A P B A C K

Concept2 Landscape_215mm_x_135mm_Bleed5mm.indd 1 25/05/2016 08:28