By Suzanne BlakeShareNewsweek is a Trust Project memberFoot Locker will be closing several stores after the retailer was acquired by Dick’s Sporting Goods in September.
Dick’s Sporting Goods announced the impending store closures amid a larger strategy shift to clean up inventory and shut down underperforming locations.
Why It Matters
As many consumers rein in their spending, some top retailers have had to close underperforming stores or even file for bankruptcy.
The store closures could indicate further strain on the retail industry at large, with more acquisitions and company shakeups expected.
...What To Know
Dick’s Sporting Goods acquired Foot Locker in September in a $2.4 billion deal.
As Foot Locker’s fourth-quarter gross margin is anticipated to drop by 1,000 to 1,500 basis points, the company is looking to get rid of unproductive assets. This means inventory will be simplified and underperforming stores will be closed for good, the company announced Tuesday.
“Dick's is essentially doing retail triage on Foot Locker, closing underperforming stores and clearing out stale inventory that's been dragging down margins,” Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek. “The specific stores closing haven't been disclosed yet, but [Dick's Executive Chairman] Ed Stack was blunt: Foot Locker 'strayed from retail 101' and lost its way when Nike shifted to direct-to-consumer, leaving Foot Locker stuck with the wrong inventory at the wrong time.”
Overall, Dick’s Sporting Goods still increased its full-year 2025 forecast for comparable sales growth to a range of 3.5 percent to 4 percent in the Dick's business, up from the 2 percent to 3.5 percent originally expected. The store closures are slated to help the company bring about more success in the Foot Locker business starting in 2026. Currently, the company expects fourth-quarter operating profits to be negative for Foot Locker.
"We need to clean out the garage," Stack said during Tuesday's earnings call. "This means clearing out unproductive inventory, closing underperforming stores, and right-sizing assets that don’t align with our go-forward vision for the Foot Locker business."
Earnings per share for Dick’s are now expected to be between $14.25 and $14.55, up from the prior prediction of $13.90 to $14.50.
Newsweek reached out to the Foot Locker brand for comment via email.
What People Are Saying
Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek: “For the company, this is about protecting 2026 profitability. They're expecting $500-$750 million in restructuring charges to clean house, but they're betting on a turnaround by back-to-school 2026 when they'll have full control of buying. Shoppers should expect clearance pricing as Dick's dumps unproductive inventory through year-end, and frankly, fewer Foot Locker locations overall as they consolidate around stores that actually work. This isn't just about Dick's cleaning up a bad acquisition. It's about whether mall-based sneaker retail can survive in an era where brands like Nike would rather sell to you directly.”
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “The announcement of closures for some Foot Locker stores is an unfortunate one, but not surprising. With the acquisition of the brand from Dick's Sporting Goods, Foot Locker is looking at the consolidation process many businesses do after being acquired. Dick's Sporting Goods is looking to create more efficiency by closing lower-performing locations and redirecting resources to other more successful areas. It also reflects the evolving nature of retail, especially during a time when inflationary pressures are taking their toll and many retailers are looking for where to cut.”
Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: “Depending on how the acquisition is ultimately funded, particularly if debt is used, Dick’s could realize substantial tax savings for several years. The company will also benefit from amortizing intangible assets and goodwill over roughly 15 years, while tangible assets such as fixtures and equipment could be depreciated over 27 to 39 years of useful life.”
What Happens Next
The specific store locations to close have not been identified.
Thompson said Dick’s has a powerful tax shield from Foot Locker, based on its reputation as well as tangible assets.
“For consumers, the restructuring should translate into better inventory management, improved store layouts, and a more consistent in-store experience as Dick’s focuses resources on the most profitable locations,” he said.
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