Foot Locker is working with Adidas to increase the sale of products from the German sportswear company at its stores, as Nike reduces its presence at the retailer.
The strategic deal between Foot Locker and Adidas follows record results for the former in FY2021, but an expectation of lowered revenue for the fiscal year ahead.
- As part of the partnership, Foot Locker will lead Adidas’ basketball category.
- There is a target for the deal to generate $2 billion in total sales by 2025.
- Adidas is expected to generate up to $105 million in revenue in 2022 from the deal.
Foot Locker generated $2.3 billion in sales in Q4 2021, a 6% increase year-over-year. Total sales reached $9 billion in 2021, a 19% uptick compared to FY2020. The company projects its revenue to drop in FY2022 due to expectations that it will not sell as many products from its top vendor, Nike. The Oregon-based retailer is selling more of its products directly to consumers.
As a result, no single vendor will represent more than 55% of Foot Locker’s supplier purchases beginning in Q4 2022, compared to 65% in Q4 2021.
Adidas is expecting a favorable FY2022 with sales projected to increase between 11% and 13%. Brand Finance’s annual review revealed that Adidas’ brand value grew 2% to $14.6 billion — the second-most valuable sportswear and athleisure brand behind Nike at $33.2 billion.
Adidas projects its net income to grow to between $2 billion and $2.1 billion in FY2022.