Monday, November 20, 2006

Foot Locker Denies Buyout Rumors, Details New Concepts

Chain Store Age

NEW YORK - Foot Locker denied on Friday that it was exploring a potential sale of the company, according to a Reuters report.

Speculation was heightened by the company's hiring of an advisory firm in August and by Foot Locker's refusal to comment on any buyout interest. On Friday, CEO Matthew Serra dispelled the rumors on a conference call with analysts.

On the same call, Serra discussed plans for a new concept, called "Footquarters," that will be focused on inexpensive footwear for the entire family. 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 said.

The company plans to open up to 70 Footquarters stores in 2007, with the first group to open in April or May and the second in the fall.

In addition, Foot Locker is opening a chain of athletic hat stores, called “Champs Sports Just Hats.” The stores will try to take market share from Genesco’s Hat World chain.

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