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Footlocker

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Rakann Ammari
Fin 431, Exam #1
February 17, 2010
Foot Locker Incorporated: Risk Prevention Methods
Foot Locker Incorporated (ticker symbol: FL) is a U.S. based company that operates worldwide. Their services include the sale of various athletic equipment, sports apparel and products. According to their company background, as of the beginning of 2009 Foot Locker operates roughly 3,600 retail stores in 21 countries worldwide (“About Us"). Although Foot Locker provides their goods through both local retail stores and an online based “direct-to- customers” program, my risk management tactics will primarily focus on local retailers and warehouses and their risks. The five risks I have chosen are employee theft within the local branches and …show more content…

The $1,120,000,000 in merchandise inventory available for possible theft is a savoring number to employees and even Foot Locker customers. Shoplifting is a prevalent crime within the United States that must be controlled by risk managers. During December of 2009, a Foot Locker in Atlanta, Georgia was robbed when “police arrested two adults and four juveniles in a smash and grab job.” (CBS Atlanta 1) Unlike employee theft, customer theft is limited to the $1,120,000,000 in merchandise inventory (“Balance Sheet”). Although the inventory and cash could potentially be recovered from the employee(s) or customer(s) through a lawsuit, as a risk manager I would need to take preventative action. I would create loss control by having surveillance cameras both watching customer and employee actions. This includes surveillance on all cash registers and credit card machines. Also, I would inform both the customer and employee they are being watched and remind them of the potential prison punishment for any crime committed by posting signs throughout the store. For employees I would conduct thorough background checks to prevent the hiring of former high profile convicts. I would also spread the finances among various managers; I would not allow a single manager to keep track of or control the finances of any single retail

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