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Foot Locker CEO: Digital investments key to adapting

Foot Locker Inc. CEO and President Richard Johnson said May 3 that the New York-based retailer is investing heavily in digital technology as it grapples with store closures and a shifting consumer mindset.

Speaking at the Footwear Distributors and Retailers of America's annual executive summit in Washington, Johnson said Foot Locker is making large investments in website upgrades as well as consumer enhancements, including app developments as well as a new loyalty program.

He said the tech upgrades "need to be done" as consumers largely move toward mobile shopping, which runs counter to sellers like Foot Locker that thrived during the glory days of malls.

"This is a revolution," Johnson said. "But chaos is good. We can all thrive in chaos. But when you're an old legacy retailer, you have to evaluate it differently."

Foot Locker, which operates more than 3,000 stores worldwide, announced in its fiscal fourth-quarter 2017 earnings call March 2 that it planned to close 110 stores in 2018. That followed 47 store closures in the 2017 fourth quarter.

The brick-and-mortar athletic footwear seller has been a casualty of well-documented mall closures across the U.S. as more and more consumers buy their athletic shoes online or directly from producers like Nike Inc. and adidas AG.

To replace the underperforming stores, the company said it would open 40 new high-profile stores over the remainder of 2018.

Johnson told the room of footwear and retail executives that legacy companies such as his need to find ways to engage digitally minded consumers, including ways to collect data from them and be connected to local markets.

"We at Foot Locker are really recalibrating," Johnson said. "The consumer has got to be at the center of it. We have to be digitally focused, mobile-enabled."

Johnson said that there is "baggage" that comes with being a legacy retailer, but that can be mitigated by producing shoes under a more compressed time frame and using "mini-hubs" to ship footwear directly into key markets in one to two days.

"Everything has changed," Johnson said. "We've never seen anything like it."

The footwear group's summit, which includes speakers from footwear producers, sellers and others, used the theme of "Succeeding in the Age of Consumer Chaos" for its 2018 conference.