Footwear and sportswear retailer Foot Locker is shifting its headquarters from New York to Florida, with cost-cutting playing a key factor in the decision.
In March 2023, Foot Locker introduced its Lace Up Plan, aimed at reshaping the company’s real estate footprint and propelling growth.
“To further support strategic progress against the Lace Up Plan, Foot Locker, Inc. is also announcing that it will move its global headquarters to St. Petersburg, Florida, in late 2025,” the company said in an Aug. 28 statement.
“As such, the company plans to maintain only a limited presence in New York City going forward.”
Foot Locker said the relocation aims to reduce costs and “further build on the company’s meaningful presence in St. Petersburg.”
As part of the Lace Up Plan, Foot Locker announced the closing of stores and e-commerce operations in South Korea, Denmark, Norway, and Sweden. It also signed an agreement with retail operator Fourlis Group in southeast Europe to transfer operations in Greece and Romania.
These actions are estimated to result in the closure of roughly 30 of the company’s stores in the Asia-Pacific region and Europe. The changes are set to be finished by the middle of next year. In the second quarter, the firm had closed 31 stores and opened five. The company currently has 2,464 stores in 26 nations across the world, with 772 outlets in the United States.
Foot Locker announced these updates as part of its second-quarter 2024 earnings release. While the company registered a 1.9 percent growth in total sales from the year-ago period, its net loss rose to $12 million from $5 million.
CEO Mary Dillon claimed that the Lace Up Plan was working, citing the company’s “return to positive total and comparable-sales growth as well as gross margin expansion in the second quarter.”
Florida Versus New York
Foot Locker’s shift from New York to Florida coincides with more businesses being attracted to the Sunshine State. According to data from the Census Bureau, Florida saw more than 50,000 business formation applications in July, far higher than the 24,000-plus applications in New York.“Florida’s entrepreneurship and job-creation boom is directly linked to a set of policies implemented by the state, first to cultivate a rich macro-environment (designed to keep inflation down and encourage active participation in the workforce) and, second, to catalyze small-business development,” they wrote.
For instance, Florida state legislation removed several barriers to business formation, such as local regulatory restrictions, they noted.
The Legislature also pushed for fast-tracking permits for businesses and instituted refunds for cases in which local governments fail to issue building permits on time. Such actions lowered development costs, thus encouraging the growth of businesses.
An October 2023 report from The Business Council of New York State pointed to the stressful situation faced by the state’s finance and insurance industries, with jobs and people leaving for other states with lower taxes and cost of living. In 2021 alone, New York lost $9.8 billion in income to Florida, it noted.
The finance sector is crucial to New York’s economy. Although the industry makes up only 5 percent of the state’s employment, it contributed 16 percent of the 2022 gross domestic product (GDP). In the past three years, almost $1 trillion in assets have moved to other states, according to the report.
“[The trend] emphasizes what we have known all along: bad fiscal and business practices in New York State equate to losing people and jobs. To reverse this trend, New York needs meaningful change now or we risk further jeopardizing the prosperity of the driving force of New York’s GDP,” said Heather Mulligan, CEO of The Business Council of New York State.
