Foot Locker has invested $100 million into GOAT Group, the parent company of secondary footwear marketplaces GOAT and Flight Club, in a move that that CEO Richard Johnson says will help the company stay relevant with [today’s] digital consumer; GOAT boasts of having over 12 million active users on its platform.
Foot Locker on the other hand, along with its capital, will bring its 3,200 stores – across 27 countries – to the strategic partnership; despite selling $10 million worth of shoes in 2018, GOAT Group has just 2 retail locations.
It’s been estimated that the Foot Locker investment was made at a valuation between $400 million and $500 million.
From a strategic standpoint, this partnership is more about Foot Locker’s deep learning of another facet of the athletic shoe business.
The company can now begin to really track retail vs resale pricing and compare that data against the quantities that they’re able to purchase.
The partnership should also serve as a traffic builder for Foot Locker’s brick and mortar locations – even if the resale inventory they keep on hand is limited.
While most of the industry’s growth is e-commerce based, people actually prefer to shop in physical stores because they want to touch and feel the merchandise.
With expensive limited edition sneakers, buyers very well may want to see them in person before making the purchase.
The GOAT Group investment also gives Locker a chance to diversify in a tangential business that is still growing – but with sales and interest in athletic shoes on the decline, it’s worth wondering if the company is late to the party.
NPD Group retail analyst Matt Powell agreed telling me “it’s noteworthy that GOAT Group and Stadium Goods [which took a $250M investment from FarFetch] were looking to sell. My sense is that the meteoric growth the secondary markets experienced throughout the first few years has started to temper and that the early occupants of the space now see it as the right time to cash out.”