• It's Coming...

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

FL: RUN This Town

FL: RUN This Town

We took a trip to RUN by Foot Locker over the weekend.  While we hope to see a more exciting store prototype in the future, at the end of the day, what we saw was a credible first effort and just the beginning of management’s efforts to revitalize and grow the chain. 

  

“We gonna run this town”

 –Jay-Z

Over the weekend we visited Foot Locker’s latest prototype in Manhattan’s Union Square, which is called RUN.  And while there is still a long way before Foot Locker is “running” any town, let alone Union Square, we believe this is step in the right direction.  The store was celebrating its official grand opening although a salesperson noted that it was open for about three weeks.  There were a couple of interesting takeaways from the visit, a few of which we share below .

Importantly, the key components to a successful running shop were all present- performance product, customer service, and community involvement.  On the flip side, we expected a more exciting and differentiated store environment.  At the end of the day, what we saw was a credible first effort that is designed to take direct aim at specialty running shops and the performance running market.  We hope we’ll see a more exciting store prototype in the future and one that is visually differentiated and unique.  For now, it’s important to remember that this is just a one store test and it is just the beginning of management’s efforts to revitalize and grow the chain.

So what did we see?

  • The grand opening event was highlighted by window signage offering 20% off the entire store (over the weekend only).   Whether it was the discount or the store’s prime location in Union Square, the store was filled with customers.

 FL: RUN This Town - 1

  • Upon entry (front 1/3 of store), the walls to the left and right were separated by gender but dominated by Nike.  This prime real estate in the store was clearly designated to showcase Nike apparel with Nike footwear, although there were other brands integrated on the wall that fit into similar color palettes.  

 FL: RUN This Town - 2

  • The footwear walls dominate the middle 1/3 of the store, with clear signage delineating different types of running footwear (Stability, Cushioning, Trail, etc…).  From a brand perspective, most major technical running product is offered.  I observed Asics, Brooks, Saucony, New Balance, Mizuno, Nike, Reebok, Adidas, and Under Armour.  Higher end product was also well represented, making the offering more akin to a Road Runner Sports and less like a traditional Foot Locker.  There was very little product in the store that could even be construed as a fashion item.  Differentiation is clearly at work here.

 FL: RUN This Town - 3

  • Sales help was abundant and the employees were not forced to wear the traditional “Striper” uniform.  Instead, employees were wearing tight fitting compression tops in black, adorned with the RUN logo.  If rolled out, we wonder if physique will begin to play a bigger role in staffing.  Service levels were noticeable, if not aggressive.  At several times during our visit, we were approached and asked if we needed any assistance.  We did engage several associates and found that knowledge levels were surprisingly high on specific running questions.  Anecdotally, we heard salespeople explaining the merits of non-Nike footwear for true running. 
  • The back one-third of the store was the most active.  In this area, we found accessories, more apparel (including technical brands like Sugoi), the cash wrap, a community room (containing trail maps, running literature, and message boards advertising local events), and two high tech treadmills (for testing shoes and conducting gait analysis).   

FL: RUN This Town - 4

Overall, we were impressed with the overall look and feel of the store but recognize this is just a one store test.   We suspect that there will be numerous tweaks to the store model, merchandise, and in-store environment as additional locations are opened.  Importantly, we see this as just one small step in the company’s efforts to 1) differentiate the store base between concepts, and 2) build new vendor relationships beyond the core.  With no major national chain of running stores, there is a great opportunity for RUN by Foot Locker to tap into of the largest athletic footwear sub-segments.

Eric Levine

Director