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Details on Industry Insight.
During Foot Locker's second quarter earnings conference call last week, company executives commented on the performance of the two test CCS brick-and-mortar stores, what could happen with CCS stores in the future and the skate business in general, according to a transcript of the call.
Last year, Foot Locker bought online retailer CCS, an important customer for the industry. This year, two CCS brick-and-mortar stores opened in Santa Monica and New Jersey. To read about a tour of the Santa Monica store, click here.
Foot Locker executives have repeatedly said they want to add the skate category to Foot Locker stores. So far, they appear to be focusing their skate efforts on Foot Locker's European stores.
Skate brands sold in Europe include DC, Etnies, Globe, and Adidas skate, according to Foot Locker's European website.
Here are more details from the conference call.
Foot Locker CEO Ken Hicks: "... They're doing nicely, and we're going to take it slow for a while, but as they continue to perform the way they are currently performing, that could be a meaningful division in a couple or three years down the road here."
The company said it will expand the CCS test in 2010 by opening more brick-and-mortar stores.
So far, the company has simply converted stores in the Foot Locker Inc. fleet into CCS locations. Foot Locker operates 3,615 stores around the world.
Foot Locker executives said CCS continues to run behind initial expectations, similar to Foot Locker's other direct-to-consumer divisions. The company believes it is a result of lower customer traffic in general rather than a specific CCS problem.
CCS launched an improved website in August.
Foot Locker appears to have big plans to add skate sections in Europe. So far, skate shoes have been added into 165 of the 514 stores in the region.
"It's off to a very, very good start and we're going to be working on getting more aggressively into that business," CEO Ken Hicks said. "And I don't think we're going to see a full presentation of it for probably close to 10 to 12 months, but we think we need to play somewhat in that arena."
Executives said vulcanized shoes are performing well at Foot Locker with the "most exciting" styles coming from Converse and Puma.