NEW YORK ( TheStreet) -- Finish Line ( FINL) has long targeted the footwear needs of consumers across America via its hundreds of mall location stores. Now, the specialty footwear company is focusing on one of the most loyal footwear shopper demographics, runners.
A 2011 partnership that began with Finish Line and Gart Companies is turning into a full time deal for Finish Line. The companies announced that Finish Line increased its ownership stake in Running Specialty Group. This chain has 57 running stores in 12 states and Washington D.C., operating under names like The Running Company, Run On, Blue Mile, and Boulder Running Company. The company also owns the Web site run.com.
With an increased ownership stake in Running Specialty Group, Finish Line believes it can do a better job of in-store service and inventory, and in return increase sales. Early sales ambitions are very optimistic. In 2013, The Running Specialty Group had annual sales of $50.2 million. Finish Line sees that number soon rising to $300 million to $400 million.
For Finish Line and its investors, this deal is incredibly worthwhile. Finish Line is expected to post full year sales of $1.8 billion in fiscal 2015, an increase of nearly 10%. The additional revenue from the Running Specialty Group and the growing sales from an in-store partnership with Macy's (M) is taking Finish Line past the $2 billion mark sooner than expected.
Finish Line is incredibly reliant on footwear, specifically from Nike (NKE) to operate its business. The new deal should help diversify some business operations. In fiscal 2014, footwear made up 89% of total sales for Finish Line. Specifically, Nike branded footwear and items made up 70% of total sales. At Running Specialty stores, footwear made up 63% of annual sales, as the stores also sell merchandise and other run related apparel.