Sneaker retailer Foot Locker Inc (NYSE:FL) has said it will curb its investments in its bricks-and-mortar stores in favour of ploughing more money into its online offering.
The moves come as consumer shopping habits shift away from buying goods in-store towards internet shopping, which is now seen by many as easier, cheaper and having more variety.
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US$230mln to be spent in 2018
In total, Foot Locker plans to invest US$230mln into its business this year, less than the US$270mln it spent in 2017.
The New York-based group said its investments this time around would have a “greater focus” on enhancements to its mobile and web platforms, the global roll-out of its new point-of-sale software, and expanding data analytics capabilities.
Spending on its store fleet, although lower than in recent years, will still make up the majority of Foot Locker’s capital expenditure in 2018.
Its in-store investments will go towards things like the ongoing execution of its remodel programs across most banners, additional shop-in-shop spaces in partnership with key vendors, and the testing of off-mall retail formats.
Dividend hike
The retail giant - worth almost US$6bn - also revealed it has hiked its first-quarter dividend by 11% to US$0.345 a share, equivalent to US$1.38 per share on an annualized basis.
It is the eighth year in a row that Foot Locker has upped its dividend by a double-digit percentage.
“Together, these actions demonstrate our board of directors' confidence in our company's ability to execute the initiatives that will transform our business faster and strengthen the connections with our customers that we believe will maintain our leadership position in a dynamic youth culture, while also extending our annual double-digit dividend rate increases,” said chairman and chief executive Richard Johnson.