Ken Hicks’ first notable moves as the chief of Foot Locker Inc. — announced Friday — were well received by most market watchers.
The company said Friday it is closing 117 stores in the fourth quarter and revamping its organization, installing Richard Johnson as president and chief executive of Foot Locker U.S., Footaction, Kids Foot Locker and Lady Foot Locker. Johnson had been president and CEO of the firm’s Foot Locker Europe unit.
“They’ve never been able to leverage synergies across divisions, and this will help them really leverage the relationships across the banners and make them more focused,” said Matt Powell, an analyst at SportsOneSource.
As part of the moves, Keith Daly, president and CEO of Foot Locker, Footaction and Kids Foot Locker, will exit the firm, while Marla Anderson, president and CEO of Lady Foot Locker, will vacate that post but remain with the company.
Christopher Svezia, an analyst at Susquehanna Financial Group, said the European business had been strong and his understanding was that Johnson had “a strong organization and operational background, and he’s good at delegating responsibility.”
Sam Poser, an analyst at Sterne Agee, was also upbeat, but said it is still a wait-and-see situation at Foot Locker.
“[Efforts at] consolidation are very good, but we [don’t] know the full extent [of their plans],” Poser said.
While they were optimistic about Johnson’s appointment, the analysts also said Daly had made significant contributions during his tenure at Foot Locker.
“Keith’s a very good merchant. He will be hard to replace,” Powell said.
All told, about 120 home-office and field management jobs will be cut as part of the consolidation, making for a $3 million after-tax charge in the fourth quarter.
For the full year, Foot Locker said it will have opened 37 stores, closed 190 and remodeled or relocated another 160 doors. A large percentage of the 117 stores slated for closure this quarter are Foot Locker and Lady Foot Locker locations in the U.S.