Iconic sporting goods, sneaker retailer closing stores

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The sneaker business used to be relatively simple for manufacturers.

They could sell shoes to customers through their own stores or to customers through wholesale partners. A company that had a fleet of its own stores might have withheld certain products for those locations, but that was the exception, not the norm.

Now, sneakers have become more than just shoes to wear or products designed to improve athletic performance — for some, they are collectibles. "Drops," the moment a specific shoe goes on sale, have changed the business.

Many sneaker manufacturers, including Nike and Adidas, have opted to sell some of their more exclusive and collectible shoes direct-to-consumer (DTC). That's something former Adidas CEO Kasper Rorsted laid out in a 2021 letter to shareholders.

"Our operating model is evolving to build direct relationships with consumers and offer them best-in-class experiences in our stores and online. As a result, our company’s direct-to-consumer business is projected to account for around half of the company’s total net sales by 2025 and generate more than 80% of the targeted top-line growth. Our e-commerce revenues are forecast to double to between € 8 billion and € 9 billion," he shared.

Nike has also moved some of its business to a DTC model.

"In 2010, DTC made up just 15% of Nike’s total revenue. By 2020, the athletics retailer had grown that number to 35%, as it stepped back from wholesale partners and focused on sales through its own stores and digital channels. At the end of its most recent fiscal year, Nike raked in $44.5 billion on the back of a 40% DTC business, with plans to make $50 billion in 2022," Marketing Dive reported.

Nike has faltered somewhat, reporting full-year 2025 revenue of $46.3 billion, down 10% on a reported basis compared to the prior year, according to the company's 2025 full-year earnings release.

"Nike Direct revenues for the fourth quarter were $4.4 billion, down 14% on a reported and currency-neutral basis," the company added.

DTC has taken sales from retailers

While retail manufacturers used to do anything to protect their relationships with resellers, that's no longer the case because of the lure of selling DTC.

"Even the most successful brands — Nike, Levi’s, and Ralph Lauren — are aggressively shifting to a direct-to-consumer model. Why? Because the traditional retail system no longer gives brands the control, data, and profit margins they need to thrive in a digital-first world," Tuple Strategy shared on its website.

DTC isn't the only strategy companies like Nike and Adidas are using.

“Ideally, they want all the channels to grow, but DTC growing faster than wholesale,” Fernández said. “They’ll cut back partners that are not working, but for the most part, I think they just want to have strong partners that believe in their vision. So it’s a combination of the two,” Cristina Fernández, a senior equity analyst at Telsey Advisory Group, told MarketingDive.

But, even if Nike, Adidas, and other sneaker companies want to maintain relationships with major players like Dick's Sporting Goods and its newly-acquired Foot Locker brand, they simply have less to sell them. Making some sales via DTC channels means that fewer sneakers will get sold via traditional retail partners.

That's at least part of the reason why Dicks's is making major changes at its Foot Locker brand.

Foot Locker brings Dick's new opportunities

Dick's Sporting Goods CEO Ed Stack made it clear that he sees the Foot Locker purchase as "transformative" for his company.

"Together, we're building a global platform that is at the intersection of sport and culture, one that we believe will redefine sports retailing. This powerful combination will allow us to serve a broader consumer base, deepen our partnerships with the world's leading sports brands, and significantly expand our total addressable market," he said during the chain's third-quarter earnings call.

He was very clear, however, that getting to that point would not be easy.

"When we announced this acquisition, we knew that business was going to need work. Let me be candid. Foot Locker strayed from retail 101 and did not execute the fundamentals. Post-COVID, Foot Locker did not react quickly enough as its largest brand pivoted toward a direct-to-consumer model, leaving Foot Locker with the wrong inventory — too much of what didn't sell and not enough of what did sell," he added.

Foot Locker needs a turnaround

"As we enter this transitional phase, the Foot Locker business, as expected, comped negatively with pro forma comp sales for the full third quarter declining 4.7%, including a 10.2% decline internationally," Stack shared.

Despite those drops, however, he remains confident that the Foot Locker brand can be turned around.

"We will bring our operational excellence, our supplier relationships, and our merchandise expertise to return Foot Locker to its rightful place as a top player in the specialty athletic channel. Today, we're even more excited about the long-term value we believe this acquisition will deliver to our shareholders. We're committed to investing in Foot Locker's business to return it to profitable growth," he added.

The CEO, however, was very blunt about the changes that need to be made.

"There's a lot happening to position the business for the short term and build for the long term. Our first priority is clear. We need to clean out the garage of underperforming assets," he said.

That will include selling off unproductive inventory, closing underperforming stores, and rightsizing assets that don't align with Dicks' plans for the brand.

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"We began this work shortly after the closing on September 8. We have identified an initial number of underperforming assets around the globe, including inventory that needs to be marked down and liquidated, along with the preliminary number of stores that need to be impaired or closed. We initiated certain pricing actions in late Q3 and we'll be more aggressive in Q4 to clean up unproductive inventory," Stack shared.

The company did not share how many stores will close or exactly when they will be closed. He did say that Dick's wants Foot Locker's reset to be completed by the 2026 back-to-school season.

Foot Locker has already shrunk

• 2023: “Lace Up Plan” and major store‑closure announcement Foot Locker announced it will shutter ~400 underperforming mall‑based stores by 2026 (about 200 in lower‑tier malls and 200 underperforming in A/B malls). Source: Retail Dive As part of the plan, the company aims to replace many closed stores with new‑concept “community,” “power,” or “House‑of‑Play” formats.

• Q4 2024: Continued closures In the quarter, Foot Locker closed 47 stores and opened 7 new ones; at that point, total global store count stood at roughly 2,410 stores. Sales dropped 5.8% in the quarter, though comparable‑store sales rose 2.6%, and the company returned to profitability. Source: Foot Locker Investor Relations

• Q1 2025 : 56 stores closed globally Foot Locker closed 56 stores globally (including in South Korea, Denmark, Norway, Sweden, Greece, and Romania), while opening nine new ones and refreshing dozens more under the rebranded store concept. Source: FashionUnited

• Q3 2025: 2025: Acquisition by Dick’s Sporting Goods; further closures and “reset” planned. Source: Dick's Q3 earnings call

Analysts see a challenge for Dick's Sporting Goods

GlobalData Managing Director Neil Saunders sees both opportunity and risk in this deal for Dick's Sporting Goods.

"There will be opportunities for synergistic savings and for better negotiating power with brands like Nike. The downside is that Foot Locker is not totally on the front foot and is still working through a bunch of issues. This will now fall on Dick’s to resolve – and while Dick’s is hugely successful, it is not tried and tested in the acquisition and turnaround space. Therefore, this is a risk," he wrote on RetailWire.

Brad Halverson, who has 30 years of retail experience, thinks Dick's can leverage Foot Locker's retail footprint.

"The upside in a Dick’s purchase here could be in the smaller, limited footage of FL retail spaces where large branded sporting goods stores are unable to go. Each location should be evaluated to determine which ones remain as athletic shoes only, while the others can offer a blended merchandising plan of sporting goods and athletic shoes," he shared with RetailWire.

Pamela Kaplan, another RetailWire Brain Trust member, thinks that potential rewards outweigh the risks.

"There is definitely an inherent risk here, but the growth opportunities are very strong. I think this is a smart move if Dick’s business plan is to go international and have a heavier shoe assortment, as well as acquire new customers. Having this positioning will certainly help with landlord and vendor negotiations to potentially bring down costs. They need to tread softly to ensure they didn’t bite off more than they can chew. Footlocker was struggling for a while," she posted.

JPMorgan analyst Matthew Boss believes that Dick's made the right choice in buying Foot Locker.

"The acquisition is expected to enhance Foot Locker’s fundamentals, including the strengthening of brand partner relationships, advancement in omni-channel retailing, and the realization of synergies. This strategic move by Dick’s Sporting Goods is seen as a catalyst for improving Foot Locker’s business outlook," he told Investing.com.

Related: Costco pulls a popular product line from its warehouse shelves

This story was originally published by TheStreet on Nov 28, 2025, where it first appeared in the Retail section. Add TheStreet as a Preferred Source by clicking here.