Foot Locker 2013 Annual Report Download - page 8

Net Income
Depreciation and
Amortization
Working Capital/Other
Capital Expenditures
Share Repurchases
Dividends
Runners Point Group
Acquisition
CASH FLOW
($ millions)
110
281
$696
Cash On Hand
$851
121 (152)
(104)
(101)
380
118
(20)
(163)
(129)
(109)
432
133
8
(206)
(229)
(118)
(81)
2012 2013
$928
$867
7
Second, I am very enthusiastic about the potential for
accelerated growth in Europe. As I mentioned, last year we
bought Runners Point Group, a protable chain of almost 200
stores with two primary banners, Runners Point and Sidestep.
The Group is based in Germany, the strongest economy in
Europe and which is now our largest market outside of the
United States. In the near term, we will focus on customer
segmentation inside Germany, and we have had good initial
success repositioning these banners to address a broader
customer base. Meanwhile, the Foot Locker banner continues
to have the opportunity to grow in existing European markets
where we believe we are underpenetrated, such as France,
Poland, Scandinavia, and Turkey.
Third, we have more progress to make in improving our
running and apparel businesses. Both of these categories are
strong, although growth slowed in 2013. The new running
product in the market from our major vendor partners is
very exciting, and we continue to build our expertise in the
category and train our associates to help customers choose
the right product for their particular style of running, training,
or walking. On the apparel front, we continue to improve our
ability to read and inuence trends, and ensure the assortments
from both our vendors and our own brands provide great
complements to the footwear in each of our banners.
Fourth, we will continue to expand the number and variety
of specialized presentations
we have in our stores in
partnership with our
vendors. With Nike,
these shop-in-shops
include House of
Hoops, Yardline,
Fly Zone, and
Jordan 23 shops.
With adidas, we have the adiCollective and Originals shops,
and we also have the Puma Performance Labs. We will use
these concepts and look for other new ideas that will enhance
our customer experience and make our stores special places to
shop and buy.
Finally, we believe we can continue to enhance the
connectivity between our store banners and our banner
e-commerce sites. We continue to invest in making our sites
more engaging and entertaining, as well as more shopper-
friendly. The result has been an unparalleled cohesion
between what the customer experiences in our store and on
that banner’s web and mobile sites. In fact, these experiences
are happening simultaneously more and more often, as our
customers seem to live online all the time, including when
they are in our stores.
We also are investing in technologies that enable us to
make our inventory, wherever it is in our system, virtually
accessible to our customers however they come to us.
Features such as “buy online, ship from store” and “order in
store, ship to home,” improve both customer satisfaction and
the productivity of our inventory. We are also using technology
to train our associates more effectively and give them tools to
serve our customers even better.
Over the longer term, we have perhaps our biggest single
opportunity: the women’s business. As I described in last
year’s report, we launched a new banner, SIX:02, to address
the footwear and apparel needs of athletically active women
in their 20s and 30s. We are pleased with the results so far,
although as of this writing we are still in test mode with
seven stores in four states. We continue to make adjustments
to enhance these stores and their potential. Between the
promising SIX:02 banner and the merchandise assortment
changes we are making to our Lady Foot Locker stores,
we believe that over time we can create a large, protable
women’s business.
2011