Foot Locker Inc. announced on Thursday (26th January) that it is laying off some of its corporate and support staff and is discontinuing its Sidestep athletic fashion brand in Europe.
The retailer also announced that Andrew Gray, executive vice president of Global Lockers and Champs Sports, left the company on January 23, the most recent executive departure in recent years.
Champs Sports is a subsidiary of Foot Locker. Sidestep operates several dozen stores in a few European countries where rising energy prices have caused a cost-of-living crisis for many.
Foot Locker (FL) disclosed the changes in a filing, as the company’s sales fell after a big jump in 2021, when the economy reopened and pandemic-related stimulus helped boost consumer spending. The company did not specify how many employees would be laid off. It stated that the cuts were made to “streamline the organization and improve operational efficiency.”
Foot Locker estimated that the layoffs would save around $18 million beginning in fiscal 2023. As of January 29, 2022, the company had 16,555 full-time employees and 33,378 part-time employees.
Foot Locker did not immediately respond to requests for comment. On Thursday, stocks gained 6.4%, reaching their highest level since February of last year.
The decision to cut staff comes after a year of turmoil for retail executives, many of whom were forced to reduce prices on clothing and other goods. Inflation forced shoppers to spend more of their money on necessities. Nike Inc. (NKE), which has shifted away from Foot Locker and other retailers in favor of selling in its own stores and online, said in September that it expected margins to suffer for the remainder of its fiscal year, which ends in May, as it reduced clothing prices.
Foot Locker stock has dropped 5% in the last year. During that time, the S&P 500 Index has fallen 7%.