Foot Locker 2006 Annual Report Download - page 11

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LOGISTICS
Delivering the right product, to the
right place, at the right time, at the
right price and in the right quanti-
ties is critical to succeed in the retail
industry. This objective is accom-
plished by Foot Locker, Inc. through
the utilization of a global network of
distribution and logistics systems. A
combination of Company-operated
and third-party distribution centers
are strategically located around
the world to allow for the timely,
cost-effective delivery of goods to
the stores. Transportation costs
are minimized by utilizing the most
effi cient third-party carriers avail-
able and by negotiating rates on a
centralized basis.
9
The acquisition of 350 Footaction stores in 2004 resulted
in an expansion of the Company’s market share in the
United States. The target customer for Footaction is a 16-
to-34 year old male who is infl uenced by the latest fashion
trends that are prevalent in the urban marketplace.
During the past two years, several key initiatives taken
by the Company have contributed to increased sales and
profi tability in Footaction stores. These initiatives include
working with the Company’s key suppliers to add excit-
ing and unique merchandise assortments, remodeling
stores and improving customer service. The profi tability
of Footaction stores was also enhanced by capitalizing on
the many synergies that operating under the Foot Locker,
Inc. umbrella provides, including the areas of logistics,
fi nance, information systems and global sourcing.
Given the success of effi ciently integrating this chain,
the Company began to expand it in 2005, and has opened
41 new stores during the past two years. At the end of
2006, Footaction operated a total of 373 stores, averag-
ing 4,700 gross square feet each. Additional Footaction
stores are expected to be opened over the coming years.
During the past two years, several key initiatives
taken at Footaction have contributed to increased
sales and profi tability.