Sporting goods behemoth Foot Locker announced last week that it is closing the 22 brick-and-mortar retail locations of their skateboarding retail subsidiary CCS to focus solely on its online retail business.
"We have made a strategic decision to focus our future efforts in the skate category on our core online business. We believe we have the scale and expertise to be successful," Foot Locker Executive VP and CFO Lauren Peter said in Foot Locker's earnings conference call on March 8. "We did incur a CCS-related impairment charge of $12 million pre-tax in the fourth quarter or $.05 per share after tax. Approximately $7 million of this charge came from reducing the caring value of the CCS trade name. The remainder of the impairment charge was due to writing off the value of CCS store-related PP&E (property, plant and equipment)."
CCS was founded in 1985 as a direct-to consumer mail-order business. Launched in an era before the internet, with limited imagery available to skateboard fans, the CCS catalog was as highly anticipated as skateboard magazines. At a time when skate hard-goods were not so readily available, CCS shipped product worldwide. By the '90s CCS built a skate team and used the riders to advertise its popular catalogs in various skateboarding publications.
Foot Locker purchased CCS from Delia's for $102 million in 2008 to help broaden its reach in the action sports market. A year later CCS opened two test retail locations in Santa Monica, Calif., and Paramus, N.J., followed by an additional 20 locations throughout the US.
Peter announced CCS's business model, "will operate the banner as a digital only business and so we intend to close the 22 CCS stores in the current quarter due to their ongoing under performance."
With the advent of the internet CCS became the go-to web destination for skateboard and snowboard gear, footwear, apparel, and action sports lifestyle products. According to marketing and media agency, Automatic Media, CCS.com gets more than two million unique visitors per day. With numbers like that, it's easy to see why Footlocker would be happy to shed the brick-and-mortar retail stores to focus on their dominant online position.
After reaching out to CCS for a statement, they declined to comment.