For more crisp and insightful business and economic news, subscribe to The Daily Upside newsletter. It's completely free and we guarantee you'll learn something new every day.
In the shoe business, everybody wants a bigger footprint.
That certainly includes American sneaker and sportswear giant Foot Locker, which announced Monday it is buying California shoe store chain WSS for $750 million and Japanese streetwear brand Atmos for $360 million. The acquisitions should help Foot Locker reposition its retail operations as the company (along with Tesla, Gap, and everyone else) continues its exodus from shopping malls.
Physical & Digital
Foot Locker brought in $7.5 billion in its last fiscal year but has been plotting an expansion beyond its flagship stores, along with a deeper dive into e-commerce. Its two new brands are a slam dunk on both fronts:
- Los Angeles-based WSS, which earned $425 million in revenue last year, gives Foot Locker a foothold among Latino customers, a fast-growing demographic in sneaker sales. WSS has 93 stores located on the West Coast and in the Southwest that are primarily located in downtown, working-class neighborhoods, far from the suburban malls that seemingly all harbor a Foot Locker.
- Tokyo-based Atmos has been the talk of sneakerheads worldwide for its exclusive collaborations with brands like Vans, Adidas, and Dr. Martens. With a palpable global buzz, the company did 60% of its $175 million in sales online last year. Atmos also gives Foot Locker its first brick-and-mortar presence in Japan with most of its 49 locations in the country.
Perfect Fit: "We absolutely believe that there are underserved markets in the U.S. that we'll be able to expand WSS into," Foot Locker CEO Richard Johnson told The Wall Street Journal. "Atmos is mostly a digitally led business, but we believe every great city has a sneaker market that could be the location of an Atmos store in the future."