Foot Locker Gains Gen Z Cred—and More Stores—With Atmos and WSS Acquisitions

Foot Locker's surprising acquisitions of streetwear brand Atmos and shoe retailer WSS for a combined $1.1 billion represent a larger shift in the nearly 47-year-old retailer’s evolution, looking beyond its comfort zone of sports-centered sneakers and apparel. In March 2019, Foot Locker pivoted with a change in its mission statement. Gone was the focus “to be the leading global retailer of athletically inspired shoes and apparel,” and in was an eye to the next generation of consumers. “Our purpose here is to inspire and empower youth culture,” Foot Locker CMO Jed Berger told Adweek. “I'm always incredibly impressed with our self-awareness; it keeps us in transformation mode always." Part of that transformation is the recognition that Foot Locker's traditional stance resonates with the widely varying interests and personas among Gen Z consumers. “It would be silly to think that we are currently speaking to all aspects of youth culture today," Berger said. "Sneaker culture is so amazing because of how multifaceted it is, and how it's attached to so many pieces of youth culture. WSS and Atmos are two incredible pieces of youth and sneaker culture that we really don't have in our ecosystem today.” Expanding consumer and geographic bases Acquiring Atmos and WSS aligns well with Foot Locker’s attempts to reach a younger and more diverse audience. “Foot Locker is focused on a more mass market than streetwear, and that’s appropriate,” said Matt Powell, a senior adviser at market research firm NPD Group. “They can talk to that customer, but it’s not a customer that they know well. Atmos will give them a lot of learning about the more upscale streetwear customer.” With its large presence in the Southwest, WSS brings Foot Locker strong Hispanic consumer penetration. It generated $425 million in revenue during the 2020 fiscal year, according to Foot Locker, which paid $750 million for the retailer. Foot Locker maintains a light footprint in California, so the purchase of Golden State-based WSS offers immediate geographic expansion. A streetwear brand, Tokyo-based Atmos brought in about $175 million in revenue during the 2020 fiscal year. Last November, Atmos merged with Philadelphia sneaker boutique Ubiq; Foot Locker paid $350 million for the brand. Atmos also bring even broader geographic strength to Foot Locker on the global stage. The brand was founded in the back streets of Ura-Harajuku, Japan's center of youth fashion. While Foot Locker does have locations throughout the Asia-Pacific region, Japan has been one market it had yet to crack, noted Powell. Lessons from a legend “Atmos is really a top-end, exclusive sneaker retailer, and that’s typically not where Foot Locker sits," Powell said. "[This deal] gives them another look at the market as well.” As it brings the two new brands together under its corporate umbrella, Foot Locker will turn to Atmos and WSS for influence and inspiration on "great storytelling and prioritizing diversity of thought," Berger said. “[WSS] speaks to a consumer base that we probably aren't close enough to because of real estate, which they have,” he continued. “[Atmos founder Hommyo Hidefumi] is a sneaker culture legend. He has a really deep-rooted connection to Japanese culture. To be able to learn from that, celebrate that and make that a part of our ecosystem is an opportunity that I can't wait to be a part of.”