Adidas is expanding its partnership with Foot Locker — a few months after the retailer said it would have less Nike product going forward.
The German brand said on Thursday, a day ahead of its earnings, that its enhanced relationship with the footwear retailer is built around “product innovation, elevated experiences, and deeper consumer connectivity.”
Including all Foot Locker banners in North America, EMEA, and Asia-Pacific, the new strategic partnership will target over $2 billion in retail sales by 2025, nearly tripling levels from 2021, Adidas said. In 2022, Adidas expects to generate incremental revenues of up to €100 million (approximately $105 million at current exchange) as a result of the new partnership.
Adidas also said that this enhanced relationship will establish Foot Locker as the lead partner for the brand in the basketball category, which is led by Fear of God founder and designer Jerry Lorenzo, spanning the lifestyle and performance categories. In addition, the collaboration between the two powerhouses will focus on key Originals franchises including NMD, Superstar and Stan Smith, and on the Adidas influencer partnership portfolio. It will also include a prominent role for Foot Locker in the launch of Adidas’ new Sportswear product division targeting the lifestyle consumer.
The partnership will also accelerate “hype” launches, as well as include the development and expansion of key franchises across women’s, kids, and apparel.
The move comes after Foot Locker made waves in February when it shared that the amount of Nike product in its stores would be significantly less. As a result of Nike’s “accelerated strategic shift to DTC,” Foot Locker stated during the call to announce its Q4 earnings that no single vendor in its stores would represent more than 55% of total supplier spend beginning in Q4 2022, down from 65% last year. The retailer also posted a challenging outlook for 2022, stating it expects sales to fall between 4% and 6% and same-store sales falling by 8% to 10%.
To execute the new plan, Adidas said it will provide Foot Locker with a dedicated team to deliver an “elevated consumer experience” both in stores and online. This will involve partnership on product development, exclusive Foot Locker positioning, increased product allocations, shared marketing spend, and an elevated premium presence across Foot Locker’s entire portfolio of banners with a special focus on key cities and communities that the companies jointly serve.
“We are delighted to be deepening our partnership with Foot Locker as we continue to execute our ‘Own the Game’ strategy,” said Adidas CEO Kasper Rorsted in a statement. “Consumers will be at the heart of this exciting collaboration and will be able to experience the adidas brand and its key product franchises, as well as new product innovations, at Foot Locker, stronger than ever before.”
“We are excited to build on our partnership with adidas as we continue our strategy to broaden our selection of footwear and apparel for the sport and sneaker communities,” added Richard A. Johnson, chairman and CEO of Foot Locker, Inc. “This close partnership will enable us to bring consumers even more unique, pinnacle products from iconic brands, as well as accelerate our push into apparel, adding new dimension to our assortment and bringing more customers into our ecosystem.”
Foot Locker is also deepening its relationship with Authentic Brands Group-owned Reebok, which was under Adidas ownership until this year. The retailer has also been seeing sizable demand for Puma, New Balance, Timberland, Ugg and Crocs.