Foot Locker is wading deeper into the digital world with its $100 million investment in the online sneaker resell platform Goat Group, the start-up’s CEO told CNBC.
The partnership with Goat, which was seen as a threat to the footwear industry, marries the leading sportswear retailer with the largest secondary marketplace for authentic sneakers, Goat Group’s Eddy Lu said on “Closing Bell.”
“As we started to chat, we realized that … our consumers shop at both [Goat and Foot Locker], so we really saw the partnership as really bridging the primary and secondary markets,” said Lu, who co-founded the company in 2015. The group also includes the Fight Club consignment shop, which was launched more than 13 years ago.
Foot Locker, which has a market cap of $6.4 billion and runs more than 3,000 brick-and-mortar stores across the globe, is looking to leverage technology to improve the customer experience and target younger shoppers, the company said in announcing the deal last week. Lu said the move also gives Goat the opportunity to build an in-store presence. Foot Locker can be found in just about any shopping center.
“Any time you can have the opportunity to partner with one of the kingmakers in the industry, you’re going to take that call,” he said.
Goat is known among sneaker collectors for delivering “high-heat” and “limited-edition products,” with more than 40 percent of its gear being sold “under retail prices,” Lu said. He hopes the deal can take advantage of online and retail sales as sneakers gain mainstream attention with giants like Nike collaborating with fashion designer Virgil Abloh’s Off-White label and Adidas working with hip hop artists Kanye West and Pharrell.
“So if you think about it, they bring their prowess in retail and we bring our expertise in digital. And because they’re a global marketplace, [there are] a lot of partnerships and a lot of synergies that can happen from that,” Lu said.
Foot Locker’s multimillion dollar deal with Goat Group is the retailer’s latest move in digital-focused companies. Within the past 13 months, Foot Locker has invested millions in children’s lifestyle brand Super Heroic, women’s luxury activewear brand Carbon38 and footwear design academy Pensole.
Goat Group has raised $197.6 million to date.
Shares of Foot Locker gained less than 1 percent during Monday’s session. The stock is up more than 7 percent this year and more than 23 percent over the past year.