Foot Locker sees India as a key market and prepares to open its first store this week

New Delhi: Foot Locker Inc., a New York-based sports specialty retailer, sees India as a priority market as it prepares to open its first store in the world’s fifth-largest economy this week.

“We see the opportunity, India is the fifth largest consumer market in the world. I would add that the brand partners we work with are also very excited about increasing their presence in this important market. So, it’s a high priority; “We see definite growth going forward,” Mary N. Dillon, president and CEO of Foot Locker, told Mint in an interview.

Foot Locker is a multi-brand retailer that sells footwear from brands such as Adidas, Nike, Jordan, Puma, Birkenstock, Crocs, Skechers, Saucony, New Era, as well as sportswear.

“Every time we think about entering a new market, really the question is: can we get the size and scale? Is there a consumer market that is big enough? Obviously, India is the fifth largest (consumer market) in the world, it’s a young market and we know that sneaker culture particularly appeals to younger people,” said Dillon, who was previously CEO of beauty retailer American Ulta Beauty.

‘Long-term view of the market’

Foot Locker has a “long-term” view of the market, Dillon said on a virtual call.

Last year, Foot Locker signed a long-term licensing agreement with Metro Brands Ltd (MBL), a Mumbai-based multi-brand fashion and footwear retailer, and Nykaa Fashion to expand its online and offline presence in India.

Under the terms of the agreements, MBL was granted exclusive rights to own and operate Foot Locker stores in India. Nykaa Fashion acts as the exclusive e-commerce partner and will operate the Foot Locker website in India and sell licensed merchandise in Foot Locker branded stores on Nykaa’s existing e-commerce platforms.

The retailer will open its first store in Delhi this week.

Post-pandemic, consumers have turned to sneakers, with more and more shoppers swapping formal footwear for several pairs of white sneakers. It is not uncommon to see executives wearing sneakers to work or young people sporting a pair in music clubs.

Globally, the sneaker category is definitely expected to continue growing and that is largely due to casualization, Dillon added. “Once you discover this category and go beyond the more functional attributes that many people use them for, like sports, you start to realize that sneakers can become part of your everyday life,” he said.

As of February 3, 2024, the company operated 2,523 stores in 26 countries in North America, Europe, Australia, New Zealand and Asia, and had a presence in licensed stores in the Middle East and Asia.

Foot Locker’s decision to enter India is motivated by a rise in sneaker culture that has seen the arrival and expansion of several brands in the country.

In April, Italian sports brand Lotto entered the Indian market through Agilitas Sports. In 2021, Aditya Birla Fashion and Retail Ltd obtained exclusive rights to distribute and sell Reebok in India and other ASEAN countries. Last year, Bata India announced the expansion of its product portfolio into sports and sportswear.

For Metro Brands, an estimated 15% to 18% of all footwear sold is sportswear, said CEO Nissan Joseph. However, the market is still in the early stages of development.

“What’s most critical is that we’ve seen growth in that category,” he said.

While established brands such as Nike, Adidas and Puma have a strong presence in the market with their standalone stores, Joseph explained that his retail concept would offer a different range of products and avoid direct cannibalization of existing businesses. “I want to say that it is not a cannibalistic sale in any way to have a Foot Locker or a Metro. There are two different consumers and even the type of products that we would carry in the sneaker range is different,” he said.

Meanwhile, for Nykaa, which also runs a fashion and lifestyle platform, Nykaa Fashion, footwear, sneakers and athleisure are growing faster than the platform.

“They are among our fastest growing categories. The second trend we are seeing very clearly, especially online, is premiumization; We do find that Indians are spending more and the average order value is increasing. There is a huge demand for international brands in the country, anything we launch that is fresh, new and international is accepted very quickly,” said Dillon.