Foot Locker Just Spent $15 Million to Get Closer to Female Consumers

Artistic Gymnast Nastia Liukin Six:02 Foot
The Six:02 shop in Foot Locker's Times Square door.
Courtesy of Foot Locker

Foot Locker Inc. is serious about getting closer to the female consumer.

The specialty athletic retailer announced Monday its strategic investment in Los Angeles-based women’s luxury activewear maker Carbon38.

Pumping $15 million in Series A funding into the brand — founded by by former ballet dancers and Harvard University classmates Katie Warner Johnson and Caroline Gogolak —  New York-based Foot Locker now holds a minority stake. That strategic investment brings the total funding raised by Carbon38 since 2013 to $26 million.

“We have admired the Carbon38 story and mission since we met three years ago,” said Foot Locker EVP and CFO Lauren Peters, who will join Carbon38’s board of directors. “[Carbon38 co-founder and CEO] Katie [Warner Johnson] and the team at Carbon38 have done an amazing job creating a brand with an extremely loyal following in the fitness and fashion worlds. In addition to the support of Carbon38’s exceptional growth potential that our investment provides, we expect to leverage the team’s keen industry insights and focus in order to elevate our own Six:02 banner’s performance.”

In a bid to boost its women’s business, Foot Locker in 2012 introduced the Six:02 banner as an elevated retail concept featuring premium fitness apparel and athletic brands. While the concept was supposed to help Foot Locker — which has had its Lady Foot Locker banner for some time — move away from the dreaded “pink and shrink it” reputation plaguing many women’s athletic brands and sellers, the company has struggled to make Six:02 resonate with female constituents. In the most recent quarter, Q3, the firm reported a double-digit decline in comparable sales at Six:02 stores, which were hurt most by dim footwear sales.

“We are excited to have Foot Locker as an investor as we continue to scale our business and expand our omnichannel strategy, both in the U.S. and internationally,”  Johnson said. “This funding enables us to accelerate our path of rapid growth and achieve our mission of defining a new category of luxury active ready-to-wear for women.”

Guggenheim Securities is serving as exclusive financial adviser to Foot Locker in connection with its investment, with Skadden Arps Slate Meagher & Flom LLP providing legal counsel. Piper Jaffray and Latham & Watkins are advising Carbon38.