Foot Locker: The Rise and Fall of the Referee That Lost Its Authority in the Sportswear Aren

The black-and-white striped jersey worn by Foot Locker employees, in the image and likeness of American sports league referees, is surely one of the most recognizable uniforms in the world. Like the clothing of its salespeople, Foot Locker was for years the referee of the sports equipment distribution playing field, reigning in the segment thanks to its predominance in the United States and its international presence, which gave it an advantage in securing deals with brands, the key to its business. The rise of the Internet, the development of competitors with a global outlook and the loss of the brands' favored treatment have brought Foot Locker to a low point. If you can't go it alone, look for allies, and that's what the Foot Locker group, whose trajectory began with the five-cent stores, has done with its sale to Dick's.

To get to Foot Locker, you have to link the history of two entrepreneurs: Frank Winfield and George Kinney. The Americans created models that, at times, were leaders in their segments and ended up joining forces to create Foot Locker.

In 1878, Frank Winfield Woolworth was a salesman in a store that distributed all kinds of goods. With sales down and stock piling up, the store decided to have a special sale with everything at 5 cents, a strategy that worked and planted the seed for the Woolwort venture. A year later, Woolworth launched its own store, called the Great 5C Store, located in Utica, New York.

Foot Locker traces its origins to Woolworht's single-price stores.

The concept worked, but the location was not good, so Woolworth opened a second store in Pennsylvania. There, he was no longer just selling products at 5 cents, but also at 10 cents, a way of being able to include more products and thus diversify his customer base.

Woolworth thus became one of the pioneers of single-price stores, giving rise to a company that grew to 800 stores and a presence not only in the United States, but also in Canada, the United Kingdom and Mexico. In the early 1990s, after years of languishing in the face of consumer changes and the emergence of competition, Woolworth eventually closed.

As Woolworth was moving into Canada, back in 1894, George Romanta Kinney started a small, affordable shoe store. Kinney Shoes grew quickly and by 1936 had become the largest family-owned shoe distribution company in the United States, with a network of 355 stores.

Kinney Shoes targeted the lower social classes, selling its footwear for just one dollar. To achieve this price, Kinney bought shoe components in volume and personally visited factories to eliminate middlemen, although he would eventually open his own production centers.

Kinney Shoes was acquired by Woolworth to introduce affordable footwear into its stores.

Woolworth and Kinney grew in parallel, but the former began to weaken in the aftermath of World War II, which left consumers with little money to spend. In the first half of the 1960s, Woolworth had to face the emergence of competition with the launch of the first Kmart stores, to which it responded with the creation of Woolco, a sort of Walmart of the time: large stores with lots of merchandise at affordable prices. Woolworth also went shopping for affordable products to sell in its stores, and it was then that it found Kinney, which at that time already had more than 500 stores in the United States and was owned by the Brown Shoe Company.

In 1964, Woolworth took over Kinney Shoes, integrated it into its business, grew it beyond the U.S. and fattened it by launching new divisions: Stylco (1967), Susie Casuals (1968) and, finally, Foot Locker (1974), dedicated solely to athletic footwear.

Foot Locker's first store opened in City of Industry, an industrial city east of Los Angeles, California. Although Foot Locker struggled to get off the ground, as the Woolworth model expired, the company began to focus on the athletic chain, which soon reached 900 stores in the United States and Canada.

In the 1980s, Foot Locker gradually separated from its parent company and in 1988 began to gain its own identity. The company introduced a new logo featuring a man dressed in black and white imitating a referee's uniform, an outfit that was also picked up by the store staff.

In 1988, Foot Locker introduced its current logo and the distinctive clothing of its employees.

By the 1990s, Foot Locker's clout was such that Woolworth eventually changed its name to Venator Group, under which Foot Locker became the largest athletic footwear chain in the United States, at a time when brands such as Nike, Adidas and Reebok had already been born and had carved out a niche in the market. The Venator Group's sports division, which included Foot Locker, Champs and Sports Autority, became the largest footwear chain in the world, with 7,200 stores in twelve countries.

The Venator Group's control of the sports division's market grew by leaps and bounds, thanks to its extensive network of stores and distribution agreements with brands from Nike to Adidas, Air Walk to Reebok. Foot Locker had the customer and what the customer wanted, whatever the sport, basketball, soccer, tennis or fitness.

With the turn of the millennium, in 2001 Venator Group ceased to exist and became Foot Locker. The footwear chain began its development beyond the shopping malls and made its way to the high street, but it did not rely solely on organic growth, but also on purchases: Carbon38, Rockets of Awesome, Super Heroic or Goat Group were among the companies it acquired. The international dimension has set Foot Locker apart from its competitors: thanks to Woolworth, the sports chain has made the leap to America, but also to Europe, at a time when most of its competitors were local.

Strengths that are weaknesses

But Foot Locker's strengths have ended up working against it. The rise of the Internet as a distribution channel has meant that the chain has an oversized store park and its positioning has been compromised by new operators that move like a fish in water in the digital environment.

Competition has increased in the sports retail sector and, especially in Europe, operators have emerged that are no longer afraid to go global. From France's Decathlon to the UK's Sports Direct, internationalization is no longer a unique feature of Foot Locker.

Brands have also been the yin and yang for Foot Locker. If distribution agreements with Nike elevated Foot Locker, they have also weakened it. Over the past decade, the big sports equipment brands have turned their backs on retailers to focus on direct-to-consumer sales, with higher margins and greater control of the channel. This has led to the weakness of groups such as Foot Locker, while others such as Decathlon have boomed with the launch of their own brands.

All these elements against Foot Locker's model began to become evident at the end of the last decade, when the chain began to slow its growth rate. However, the Covid-19 crisis and the sports boom it triggered hid for a couple of years the tears in Foot Locker's seams.

Foot Locker's strengths became weaknesses, but the Covid-19 crisis covered up the group's downfall for a few years.

If in 2019 the company exceeded $8 billion in turnover with sales of $8.005 billion, in 2021 it brushed $9 billion, closing the year with $8.958 billion in sales. In 2022, the company reduced its sales by 2.35%, in 2023 by 6.78% and in 2024 by 2.24%.

Foot Locker, which operates the Foot Locker, Kids Foot Locker, Champs Sports, WSS and Atmos chains, closed 2024 (ending February 2025) with sales of US$7,971 million, but managed to close the year with a loss of US$330 million in 2023.

In 2021, the year Foot Locker reached its sales peak, it had 2,858 stores. Today it has 400 fewer, with a network of 2,400 stores in twenty countries in North America, Europe, Asia and Oceania, as well as franchises in Europe, the Middle East and Asia. In the last fiscal year, Foot Locker has exited markets such as South Korea, Norway, Sweden and Denmark and has transferred its business in Greece and Romania to a franchisee.

Foot Locker is now entering a new phase. On May 15, Dick's Sporting Goods, one of the largest sporting goods chains in the United States, announced the signing of an agreement to take control of Foot Locker. The deal, which has won the unanimous support of the two companies, is valued at 2.4 billion dollars. The chain born of the 5-cent stores will now be part of a group that, with fewer stores (856), has a much higher turnover: 13,443 million dollars at the end of 2024.