Foot Locker announced Thursday that it made a "strategic investment" of $100 million in sneaker marketplace GOAT Group, which also owns consignment retailer Flight Club after a merger of the two businesses a year ago.
The fresh funding from the athletics retailer brings the total raised by the sneaker company to $197.6 million since its founding four years ago, according to a company press release emailed to Retail Dive, and is Foot Locker's largest financial investment.
As part of the investment, Scott Martin, Foot Locker's senior vice president of strategy and store development, will join GOAT Group's board of directors. A GOAT Group spokesperson also noted in an email that Foot Locker's investment was the largest to-date "into the secondary sneaker market."
Foot Locker has been an active player in making its own destiny this year. The retailer has been bolder with store concepts in recent months, launching a series of pop-ups with Nike in October around the NBA season, and the "Power Store," centered around being a "hub for local sneaker culture, art, music and sports," in January. But the retailer has also been strategic about building up partners beyond just Nike, perhaps in light of past criticism of its reliance on the footwear brand.
This $100 million investment in GOAT Group comes on the heels of a $3 million investment earlier this year in kid's athletic shoe startup Super Heroic, founded by two former Nike execs. In that case, Foot Locker installed itself as a board adviser for the company, and this most recent move shows how the footwear retailer is beginning to make a strategy of investments in a new wave of shoe retailers.
According to the release, Foot Locker and GOAT Group will be creating "exclusive customer experiences" through their partnership, and the latter also expects to use the investment for the expansion of its global operations and omnichannel experience.
There's no doubt that the size of Foot Locker's physical footprint will help GOAT reach more customers, but Foot Locker is also poised to profit from partnering with a company that operates in an extremely popular, verging on obsessive, part of the athletics market. Not only have sneakers, and the athleisure movement more broadly, given athletics retailers something to latch onto, but they've also invested in new ways to drive sales from the category, including mobile-driven shoe drops.
Sneaker resale, which garners prices well above the original retail tags, has also become a slice of the luxury market, as exemplified by Farfetch's $250 million acquisition of Stadium Goods last year.
"With over 3,000 retail locations, Foot Locker will support our primarily digital presence with physical access points worldwide, bringing more value to our community of buyers and sellers," Eddy Lu, co-founder and chief executive officer of GOAT Group said in a statement. "Having Foot Locker as a strategic partner will also expand our business as we continue to scale our operations both domestically and internationally."