Foot Locker 2006 Annual Report Download - page 5

Winning Combination
Our Company has a winning combi-
nation of competitive strengths and
strategic advantages that positions
us well to build shareholder value.
These strengths include:
• Meaningful market share position
• Extensive global diversifi cation
• Highly recognizable brand names
• Strong infrastructure with available
capacity to support growth
• Management depth
We have structured Foot Locker,
Inc. as a portfolio of highly successful,
complementary businesses – a struc-
ture that cannot be easily replicated
by any other U.S. or internationally-
based athletic footwear and apparel
retailer. With almost 4,000 stores
located in 20 countries in North
America, Europe and Australia, as
well as a direct-to-customers catalog
and Internet business, we are the
world’s leading specialty retailer of
athletic footwear.
Over the past several years, we
have extended our reach in the
global marketplace while further
differentiating our separate busi-
nesses to appeal to a wider and more
diverse customer base than would a
single-brand strategy. We employ a
marketing strategy that is designed
to enhance the distinction between
the six nameplates under which we
currently operate – Foot Locker, Lady
Foot Locker, Kids Foot Locker, Foot-
action, Champs Sports and Eastbay
– brands that are among the most
recognizable in retailing.
The strength of our infrastructure
and depth of our management teams
also set Foot Locker, Inc. apart from
the competition. We believe this
strong foundation will enhance our
ability to grow our Company effi cient-
ly over the coming years.
Building for the Future
We operate our business with a “win
now” philosophy, but also under-
stand that our strategic planning
must consider long-term opportu-
nities. Our objective is to sustain
our Company’s competitiveness by
meeting our customers’ needs as
they evolve with trends in fashion.
Maintaining the strength of our base
business while pursuing new mean-
ingful growth initiatives are our two
overriding priorities.
Heading into 2007, we are very
encouraged by three of our key initia-
tives. First, we continue to execute
our real estate program effectively,
which embodies strategies designed
to increase our sales per square foot
and operating profi t margin. During
2006, we completed 549 real estate
projects. We opened 146 new stores
in markets where we have previously
operated; we closed 125 poor-per-
forming stores; and we relocated or
remodeled an additional 278 stores.
The completion of these projects
contributed to the year-over-year
increase in our sales per gross square
foot, which reached $365 in 2006.
In late 2005, we reached an agree-
ment with a well-established fran-
chisee to open Foot Locker stores
in several countries in the Middle
East, an area where we do not have
the necessary expertise to operate
owned stores successfully. Three
stores were opened in 2006, and
a total of 75 franchised stores are
planned in this region over the next
several years.
Gross Square Footage
Store Summary 2006 2007
January 28, February 3, Remodeled/ Average Total Targeted
2006 Opened Closed 2007 Relocated Size (thousands) Openings
Foot Locker 1,398 37 67 1,368 77 4,000 5,509 25
Footaction 363 17 7 373 14 4,700 1,744 10
Lady Foot Locker 554 22 19 557 22 2,200 1,243 10
Kids Foot Locker 327 23 15 335 17 2,400 810 10
Foot Locker International 723 20 10 733 107 2,900 2,107 10
Champs Sports 556 27 7 576 41 5,500 3,138 25
Total 3,921 146 125 3,942 278 3,700 14,551 90
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