As part of its push to grow and stay relevant among younger consumers, Foot Locker Inc. (FL, Financial) announced a $12.5 million minority investment in children’s apparel company Rockets of Awesome on Tuesday.
The New York-based retailer of athletic shoes and apparel’s investment is part of Rockets of Awesome’s $19.5 million Series C funding round. It is also the latest initiative in a string of investments the company has made in online platforms as top brands like Nike (NKE, Financial), which have traditionally been sold by retailers like Foot Locker, are focusing more on selling directly to shoppers. Other deals the company has made in recent months include a $100 million investment in Goat Group, an online marketplace for buying and selling authentic, specialty sneakers, as well as ventures with lifestyle brand Super Heroic, activewear brand Carbon38 and Pensole, a leading footwear design academy.
In a statement, Foot Locker Chairman and CEO Richard Johnson said the company is committed to “evolving with the ever-changing retail landscape” through its investments.
“We are excited that our partnership with Rockets of Awesome will enable Kids Foot Locker to deliver new, innovative products and experiences,” he said. “We look forward to collaborating with them on brand development, product collections and go-to-market plans to help realize additional growth for both companies.”
As part of the deal, Rockets of Awesome, which sells affordable, high-quality and fashionable children's clothing, will be opening mini-stores within Kids Foot Locker locations across the country and will also be selling its merchandise on its children’s website. In a statement, Rockets of Awesome founder and CEO Rachel Blumenthal said the deal is a “powerful validation” of the brand’s “mission to simplify parents’ lives and enable them to celebrate real life with their kids.”
“With Foot Locker’s support, we look forward to bringing our unique, high-quality merchandise and convenient shopping experience to even more families everywhere,” she added.
According to CNBC columnist Lauren Thomas, Blumenthal said the funds from Foot Locker will also help Rockets of Awesome to open its first standalone store before back-to-school shopping begins this summer.
Following the announcement, shares of Foot Locker slumped 1.25% to $59.05. According to GuruFocus, the stock gained 13% in 2018 and is up approximately 10% year to date.
Gurus who are currently betting on the stock include NWQ Managers (Trades, Portfolio), Jim Simons' (Trades, Portfolio) Renaissance Technologies, Lee Ainslie (Trades, Portfolio), Richard Pzena (Trades, Portfolio), John Rogers (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), John Buckingham (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Philippe Laffont (Trades, Portfolio).
Foot Locker is scheduled to report fourth-quarter and full-year 2018 earnings on March 1.
Disclosure: No positions.
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