Nike and Foot Locker plan to open up to 50 “House of Hoops by Foot Locker” stores in the U.S. over the next three years, with the first expected in early ’08 in Harlem, replacing an existing Foot Locker location. The stores, which extend the existing store-within-a-store concept of Nike products at Foot Locker locations, will offer exclusively Nike, Jordan and Converse basketball footwear, apparel and equipment. Most of the stores will be converted Foot Locker shops, though some new ones will be created (
Nike). The WALL STREET JOURNAL’s Sarah McBride reports the move is “part of Nike’s effort to create new retail concepts that cater to specific consumer niches and cut through a cluttered retail environment for athletic footwear.” The arrangement also allows Nike to “cut its competitors out of the stores,” while Foot Locker “gets to position itself as a more high-end, fashion-setting retailer beyond its more staid mall stores.” McBride notes “tensions built earlier this decade, when Nike rebelled against Foot Locker’s strategy of heavy discounting.” Foot Locker “slashed orders from Nike, and Nike in turn restricted Foot Locker’s access to its most popular brands.” But a Nike spokesperson said those issues are “very much in the past” (
WALL STREET JOURNAL, 5/23).
