Foot Locker bid for Docker's licensee rejected

Footwear specialist Genesco rejected Foot Locker Inc.'s $1.2 billion takeover offer Monday, but Foot Locker isn't ruling out the possibility of raising its bid for its footwear and accessories rival. Genesco operates over 2000 stores in America and Canada, and further wholesales the Dockers brand.

Foot Locker had proposed paying $46 a share for Genesco in a deal that would have united its Foot Locker, Footaction, Lady Foot Locker, Kids Foot Locker, Champs Sports and Footquarters chains with Genesco's Journeys, Lids, Hat World and Underground Station brands.

Nashville-based Genesco said in a letter to Foot Locker that the offer undervalued the company and that previous discussions about a buyout had mentioned prices between $48 and $50 per share. Foot Locker, based in New York, operates about 4,000 stores in 20 countries in North America, Europe and Australia.

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23 April 2007

Foot Locker sees strong online sales

Foot Locker Inc. has increased its web turnover 6.8% in the third quarter while total sales increased by 1.6%. The retailer's e-commerce sales in Q3 totalled $63 million vs. $59.3 million in Q3 2005. Total sales increased slightly to $1.43 billion, compared with sales of $1.40 billion for the same quarter in 2005. For the first nine months of the year, Foot Locker's web sales totalled $182 million, an increase of 13.1% from online sales of $160.9 million for the same period in 2005.

Foot Locker CYC Matthew Serra said in a statement: “While our comparable-store sales continued to be negatively affected by a challenging athletic retail market in Europe, we were able to stabilize our earnings in this region versus the comparable period of last year and capitalize on business opportunities in other areas where we operate.” Foot Locker is No. 44 in the Internet Retailer Top 500 Guide to Retail Web Sites .

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7 December 2006

Footlocker to launch ‘Footquarters'

Rumours circulating that Foot Locker is exercising potential to sell its companies, were denied on Friday, according to a Reuters report. Speculation was heightened by the company's hiring of an outside advisory firm in August and by Foot Locker's refusal to comment on any buyout interest. On Friday, CEO Matthew Serra quashed the rumours and instead mentioned the Group is planning a new concept, to be called “Footquarters.” Footquarters will be focused on less expensive footwear and trainers, oriented at a family customer. Approximately 60% of merchandise will be athletic shoes. Dress and casual shoes, which carry higher profit margins than athletic footwear, will comprise the rest.

“We feel that our buying power in the athletic segment will give us enhanced margins vs. our competition, so I personally believe it could be a very large division,” Serra stated to Reuters. The company plans to open up to 70 Footquarters stores next year, with the first group to open by mid 2007 and the second in the fall.

www.footlocker.co.uk
20 November 2006

Foot Locker sale affecting Puma

Foot Locker Inc. is in preparation to sell itself to two private equity groups — a cleanup that sources said is impacting Puma more than other vendors. Financial and market sources said Puma was asked to take back product on orders already shipped and that sales of back-to-school offerings are likely to be hurt by discounts at retail on Puma merchandise. Private equity sources said they expect an announcement of a deal to sell the athletic retailer to Kohlberg Kravis Roberts & Co. and Apollo Management by the end of August. The per-share price is said to be at least $30, but could be as high as $31 or $32. Puma was asked to take back product on orders already shipped and sales of back-to-school offerings are likely to be hurt by discounts.

An announcement of the deal was expected in early August, but was delayed due to the hiring of Evercore Partners. Private equity sources said Evercore was hired by Foot Locker to provide a "fairness opinion." The opinion provides an evaluation of the sale prospects, as well as whether the proposed agreement with the two private equity firms is a good and fair deal for shareholders.

Meanwhile, Foot Locker has been tightening up inventory levels, according to financial sources. All of its vendors are feeling some heat in terms of being asked to take back some product. Those same sources said in some cases, the existing products in inventory are being discounted either in stores or at the retailer's Web site. This is fueling speculation that chargeback and markdown requests will be forthcoming when future orders are placed.

Sources said Puma is getting hit the hardest, which has led to concern about the possible impact on the supplier's earnings. Puma is set to announce second-quarter earnings this week. In February, Europe's second-largest activewear maker raised its operating profit forecast to at least 350 million euros, or $418.9 million at then-current exchange rates, from an earlier projection of 300 million to 330 million euros, or $359.1 million to $395 million. The company said sales were expected to increase 30 percent to 2.3 billion euros, or $2.75 billion, due to an expected boost owing to strong orders from the U.S., Europe, the Middle East and Africa.

31 July 2005

Foot Locker courted by KKR

The sale of Foot Locker has not yet been made official, but rumours are already circulating over possible interested parties. Private equity group Kohlberg Kravis Roberts & Co has been identified as a leading contender for the footwear giant. According to private equity sources, a deal could be made within the next two to three weeks. The sources told Women’s Wear Daily that the bid price could be higher than $30. A buyout at $30 a share would value the company at around $4.4 billion. Other possible bidders that have been mentioned are Apollo Management, Thomas H. Lee Partners and The Blackstone Group. None of the parties commented on the rumours.

Financial specialists have said that private equity companies are in a hurry to close deals in anticipation of what might become a slower economy later on in the year. Citing Bain Capital and The Blackstone Group’s buyout of arts and crafts retailer Michaels Stores Inc as an example of how quickly leveraged buy-outs are completed and how expensive they are, some financial sources believe Foot Locker might be sold at a premium too. The sources base this belief on the fact that Foot Locker, like Michaels, is a specialty retailer with a large share in a niche market and generates substantial cash flow. Last year, the retailer was said to have generated $260 million in cash.

New York-based Foot Locker has 4,000 stores in 20 countries in North America, Europe and Australia. The retailer operates a variety of brands under the Foot Locker umbrella, including Foot Locker, Footaction, Lady Foot Locker, Kids Footlocker and Champs Sports. It sells both athletic footwear and apparel. The company is said to have considered purchases of its own at one point, but abandoned the plans in favour of a sale.

www.footlocker.com
11 July 2006

Footlocker lowers sales forecast

Foot Locker said Thursday that comparable-store sales, or sales in stores open at least a year, rose 0.5% in its first quarter. Sales for the 13-week period ended April 29 fell 0.9% to $1.36 billion. Excluding the effect of foreign currency fluctuations, total sales increased 0.2%.
The specialty athletic retailer, which operates around 4,000 stores in 20 countries in North America, Europe and Australia, now expects to earn 36 cents a share to 37 cents a share in the first quarter compared to its previous March guidance of 37 cents a share to 40 cents a share. Analysts are expecting earnings of 39 cents a share on revenue of $1.41 billion in the first quarter. The company reports firs-quarter results on May 17.

"First quarter comparable-store sales results were solid in our North American businesses, but continued to be weak in our European stores which partially reflected our less promotional posture than the first quarter of last year," the company said.
The company's shares are trading down $1.03, or 4.4%, at $22.63 Thursday.

Footlocker will be back on track

Footlocker, the world's leading athletic-footwear retailer hit a rough patch in 2005 amid a marketwide slump in Europe, where Foot Locker derives 25% of its sales. Its shares slipped more than 14% for the year. Now, the stock looks cheap, and Foot Locker's long process of shifting its real estate around to improve its business continues. Its domestic business is chugging along. Its balance sheet and cash flows continue to improve. For anyone willing to stick it out through the downturn in Europe, the price is right to own the dominant force in the world's $17 billion sneaker market.

"People have gotten bored with Foot Locker because there is no immediate catalyst to drive up the stock, but it's very safe and cheap without a lot of operational risk," says Kenneth Shubin Stein, a hedge fund manager with Spencer Capital Management. "It's highly probable that this is going to be a more profitable company. It's just a matter of time. They have to negotiate their leases as they come up, but they can't do them all in one year. They've been at it for a couple years, and it'll take a few more years."

About three years ago, Foot Locker began relocating, remodeling and closing U.S. stores in earnest. It had amassed a number of large-format stores housing multiple concepts, but the locations worked poorly. So the company backtracked.

In 2006, the company plans to add 175 new stores -- 80% of which will be in the U.S. -- and close 110 underperforming locations. As a result, its total store count in each of its various formats will increase for the first time in seven years. In total, it has about 4,000 stores in 20 countries.

As a result of the heavily promotional market in Europe, where Foot Locker stores are struggling under the weight of excess inventories, the company's operating margins declined last year, for the first time this decade, to 7.2% from 7.3% in 2004. Still, its operating margins were closer to 6% when the real estate transformation began, and Shubin Stein says they can go as high as 9% to 10% in the years ahead as progress continues (his firm owns shares of Foot Locker).

"I think Europe will continue to be tough for the next 12 months," said Matthew Serra, Foot Locker's chairman and chief executive, at the recent Bank of America Consumer Conference in New York. "It's not going to be a disaster, but it's going to be tough. I foresee another quarter or two of cleaning out excess inventories."

Despite the problems in Europe, the company still produced 3.9% same-store sales growth for its holiday quarter as U.S. demand for high-end sneakers from the likes of Nike (NKE:NYSE) and Adidas stayed strong. Foot Locker earned $96 million, or 61 cents a share, up from the $89 million, or 57 cents a share, it earned for the year-ago period. Excluding certain items, it earned 55 cents a share, meeting Wall Street's expectations.

While investors wait for a turnaround in Europe to boost the company's income statement, its balance sheet continues to strengthen. It ended the year with $600 million in cash, leaving it with $261 million net of debt. That marked an improvement of $134 million over 2004. It used strong cash flows in 2005 to reinvest $163 million in capital expenditures, pay down $35 million in long-term debt, contribute $26 million to its pension fund, pay out $49 million in dividends and repurchase 1.6 million shares of its stock.

Footlocker Acquires Irish Stores

US athletic shoe and sports retailer Foot Locker has acquired 11 stores in Ireland from the Champion Sports Group. The company, which expects to operate 485 stores in 14 European countries by the end of the year, said it expects the deal to add to earnings by 2005.

20 October 2004

Nike And Foot Locker Back In Running

Some of Nike's hottest sneakers, including the Jordan 19 and Shox, are once again lining the shelves of Foot Locker stores this back-to-school season after a hiatus that stretched for more than a year and marked a bitter chapter in the relationship between the two athletic shoe giants.

Nike left Foot Locker out in the cold during last year's back-to-school shopping season when it cut off the supply of marquee sneakers like Air Jordans and Air Force Ones that sell for upward of USD100.

But Nike suffered, too, in the dispute, which centered on Foot Locker's pricing and promotional strategy. Though Nike upped its quotas to rival chains like Finish Line and Footaction, it never fully compensated for the loss of business with the massive Foot Locker chain, which operates 3,900 stores and is Nike's largest customer.

Nike and Foot Locker reached a tentative truce in November 2003, but it is only now that some of the most sought-after Nike sneakers are arriving in Foot Locker stores. In another sign that the two companies are once again collaborating, Nike and Foot Locker plan to release a joint marketing campaign today for the Air Max Shootout, a sneaker that is part of the Nike 20 Collection and available only at Foot Locker stores.

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20 August 2004

Foot Locker Reports Profits

Shares of Foot Locker Inc. rose more than 5 percent last week following news that the No. 1 U.S. athletic shoe retailer was being added to the Standard & Poor's MidCap 400 Index.

A company's shares usually react positively after they are added to a major S&P index, as most index fund managers are obliged to buy the stock under their portfolio selection guidelines.

The chain of about 3,900 retail stores in the United States and overseas has posted consistently higher earnings and revenue in the past four quarters.

www.footlocker.co.uk
2 Aug 2004

Footlocker In Antigay Dispute

American legal team The Lambda Legal Defense and Education Fund filed a lawsuit against Foot Locker in the US yesterday alleging that a former employee of the retailer had been subjected to antigay harassment by co-workers and supervisors.

"Kevin Dunbar was subjected to a nightmarish workplace and then fired because he is gay," said Greg Nevins, a senior staff attorney for Lambda Legal. "Foot Locker could have addressed this problem, as it clearly promises employees in its policies, but instead chose to ignore it and make it worse.

According to the suit, when Dunbar formally complained about his treatment, he was promised confidentiality, but other co-workers found out about the harassment. Dunbar was transferred to a different store location and his new store manager refused to shake his hand and made anti gay-remarks.

The lawsuit continues.

www.footlocker.co.uk
1 July 2004

Foot Locker Reports Increased Earnings

Footwear and trainer retailer Foot Locker Inc. reaffirmed a projected 10 percent to 20 percent second-quarter earnings increase to the range of 27 cents to 30 cents per share.

The company's estimate comes in on target with analyst predictions of 28 cents to 30 cents per share. Foot Locker reported earnings of USD36 million, or 25 cents per share, on revenue of USD1.12 billion in the same period last year. Shares of Foot Locker fell 0.7 percent to USD23.24 during late-afternoon trading on the New York Stock Exchange.

www.footlocker.co.uk
17 May 2004

Puma & Foot Locker Launch Beach Ball

Puma and Foot Locker Europe are teaming up to launch Beach Ball, a unique event surrounding the football championships in Portugal this June.

The Beach Ball weekend of events will kick-off Saturday with a VIP tournament mirroring the schedule of matches being played in Portugal by the pros. Some of the players will include Swedish footballer Mats Magnusson, UK band Ladytron and Mani from Primal Screamm. Following the VIP finals on Sunday will be the winners of the Foot Locker consumer contest with the consumer final being held Monday afternoon.

The consumer contest is being promoted with a TV spot running on MTV, in-store displays in over 430 Foot Locker locations across Europe and on-line mini site at footlocker.puma.com. The TV campaign and in-store creative have a similar look to PUMA's new Italia campaign, which focuses on two die-hard Italian football fans. The Foot Locker spot features the two fans as they try to find their way to Portugal for the Beach Ball tournament.

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>> more Puma news on FashionUnited
8 june 2004

Footlocker Reports Jump in Earnings

Foot Locker Inc. posted a 26 percent jump in first-quarter earnings amid a 5.1 percent sales increase due to store openings.

For the quarter ended May 1, the New York-based chain late Wednesday reported earnings of USD48 million, up from USD38 million last year.

As of May 1, the company operated 3,587 stores in 16 countries in North America, Europe and Australia. Foot Locker further stated they expect full-year earnings to rise 10 percent to 20 percent.

www.footlocker.co.uk
20 May 2004

Nike and Foot Locker One Step Closer?

Early last year, Foot Locker announced it was cutting its Nike orders to protest restrictions on shoe prices and selection. Nike responded by slashing its planned 2003 shipments to Foot Locker by $400 million, withholding some of the most popular Nike shoes.

As both companies have reported recent losses in sales, analysts say the two companies have showed signs of wanting to make up.

12 August 2003
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www.nike.com

Footlocker Continues UK Expansion

Sportswear retailer Footlocker is set to continue the 50-store chain's UK expansion despite the departure of European chief executive officer Simon Cooper.

Cooper has been poached by Pentland and will become president of swimwear brand Speedo on June 9. Sources close to Footlocker said the setback was unlikely to slow its UK expansion.

29 May 2003
www.footlocker.co.uk

Foot Locker profits up; stock jumps

U.S. athletic shoe retailer Foot Locker announced this week that quarterly earnings rose 36 percent on sales of more profitable products. As a direct result its shares rose nearly 10 percent.

The company runs about 3,600 athletic specialty stores in 14 countries, and has benefited from its move last summer to cut back on high-end sneakers from Nike, its biggest vendor.

Nike is the lowest gross-margin product that the company carries. A Wall Street analyst commented: “Since they are carrying less Nike product and more Reebok, Adidas, Puma and K-Swiss, which have substantially higher margin contribution than the Nike products, that's obviously helping the bottom line.”

Foot Locker said net income for the third quarter ended on November 2 rose to GBP 26 million, from GBP 21 million, a year earlier. Excluding discontinued operations, profit increased to GBP 26 million, from GBP 24 million.

In midday New York Stock Exchange trade, shares of Foot Locker were up $1.09, or 9.6 percent, at $12.50. They peaked at $12.70 earlier in the session, their highest level since July.

November 22, 2002
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