How Foot Locker’s Greenhouse incubator plans to take on the fragmentation of sneaker culture

Peralta (right) was hired by CMO Berger to lead Greenhouse last year

Foot Locker is readying the official launch of Greenhouse, its incubator designed to bring the hottest under-the-radar creators together with the scale of its vendors, production line and brand awareness. Based outside of the company’s HQ, the division is the product of a successful agency-client relationship designed to “take control” of the volatile streetwear narrative.

Brand incubators are now an almost-critical division in any company looking to avoid the perils of disruption. Giants in FMCG, food and beauty – from L’Oréal to Nestlé –have launched units to speed up the rate of their product innovation and contend with the flux of direct-to-consumer brands flooding the market.

For retailers and fashion brands, however, the strategy is not such an obvious one to commit to. The former works off a buying model, which provides at least some flexibility in terms of brand offering, while the latter lives and dies by its ability to nurture one strong brand of its own.

It took Foot Locker more than three years to realize an incubator could help the company do something else: become one that set the trends, not one that follows them.

The insight came from Team Epiphany, the ‘original influencer agency’ that has been a Foot Locker partner for a number of years. It was originally brought on board to draw up culture maps and present insight into product developments through the lens of street culture: “Why are we seeing purple? Where did it come from? How long is it going to be here?”

“After three years of doing that across Footlocker ... one of the trends we were really seeing was the need to take control of our own narrative,” remembers Coltrane Curtis, founder and managing partner at Team Epiphany. “How are we going to be a part of culture? How are we going to push culture forward? The only way you can really do that is by creating something. That thing was Greenhouse.”

The need to get one step ahead of culture was born out of a business necessity as much as one of street cred. According to Curtis, the most popular, cult brands are getting smaller and, well, more cult on the sportswear scene.

Meanwhile Foot Locker, with its meteoric growth in recent quarters, is only going to continue getting bigger and more corporate through the nature of its success – an issue calcified by the Business of Fashion headline ‘Can Foot Locker Be Cool?

Its vendors are in a similar position. Suppliers to Foot Locker, which include the vast majority of the world’s biggest sportswear brands, are also trying get a jump ahead on product trends as more niche labels gain traction with sneakerheads. Greenhouse aims to curate partnerships between creators, including musicians, tech startups and product designers, and brands such as Adidas and Nike, to placate this tension.

“We already have some really intricate knowledge of what it is that all out different vendors are trying to create,” says Mel Peralta, an apparel entrepreneur-turned-Timberland marketer who was brought on board to lead the unit. “A lot of times you'll find that folks are trying to work on the same road and don't have any idea that these things are going on in parallel and we'll try and marry those brands to really do something special.

“Other times it's really an education process. Some of our vendor partners are some of the best in the world but at the same time maybe they're not as close to the ground as Epiphany or as Greenhouse is, so we need to bring opportunities to them.”

Different collaborations will fall under different names. Canvas will partner artists with brands, for instance, while Project 366 will team an experienced designer with a newcomer to create a new label.

Greenhouse itself is an incredibly lean team of three full-time staff “with a Foot Locker email address”, who have desks in its main headquarters on West 34th St in Manhattan but invariably choose to work out of their own space or Epiphany’s office. The agency provides strategists and creatives to scale up the unit where necessary, and currently has two members working full time on the project.

The third piece of the puzzle – the Greenhouse trifecta – is Lede, which handles PR and communications for both B2B and B2C coverage and buzz. Peralta is – for the time being, at least – committed to such a decentralized client-agency relationship.

The streetwear veteran wants Greenhouse’s creations to span beyond the usual Foot Locker stock of sneakers, socks and snapbacks: he envisions bicycles, skateboards, coffee tables...things that would take up too much room on the shop floor but could be sold on Greenhouse’s forthcoming app.

A website will host a raft of bespoke streetwear content, but consumers will only be able to purchase on mobile (“[Kids’] new home and vehicle for discovery is their phone,” says Peralta). Items will be branded inside a subtle Greenhouse parenthesis; select products will eventually make it into Foot Locker stores further down the line.

Three years in the making and a year since its soft launch, Greenhouse was one of the hottest talking points of Foot Locker’s investor day in March. When the app goes live next month, all investor and industry eyes will be watching for the success or failure of its launch, as well as the consequent success or failure of the project.

Peralta and Curtis, however, are not feeling the pressure of shareholders. They’ve largely been protected from quarterly financial questions by chief marketing officer, Jed Berger, who was one of Curtis’ direct points of contact since the very beginning.

“A guy like that who's worked his way through the ranks and got himself to a position that he's earned, as opposed to someone that's been hired off of a resume or cool LinkedIn page...that guy understands what’s going to work,” says the agency founder.

“Coltrane and [Epiphany] wouldn't have been a part of this project at all if [Foot Locker] was like, ‘ok guys, let's see what you got in six months',” adds Peralta. “That's not true incubation. On our side it's much less ... about profitability than it is about bringing new narratives, new storytelling and new products into the Foot Inc ecosystem.

“Just having that appetite is key, and a year in, that appetite from my senior leadership hasn't gone anywhere.”

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