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Foot Locker offers itself for sale

July 31, 2007|From Bloomberg News

Foot Locker Inc., the largest U.S. athletic-shoe retailer, put itself up for sale Monday and forecast its first loss in six years after increasing discounts.

The shares fell to their lowest price in 3 1/2 years.

The company said that it received inquiries from buyout firms and hired Lehman Bros. Holdings Inc. for advice on strategy. Foot Locker spokesman Peter Brown declined to comment further.

Foot Locker said its second-quarter net loss would be 17 to 20 cents a share. The New York-based company in April unsuccessfully bid $1.2 billion to acquire Genesco Inc. to add the Johnston & Murphy and Journeys chains as customers buy fewer athletic shoes in favor of more general-use footwear.

"Casual trends and lack of hot marquee products are hurting performance categories," wrote Jeffrey Edelman, an analyst with UBS Securities in New York, in a note Monday.

Second-quarter sales at stores open at least a year may fall as much as 8%, Foot Locker said. The retailer had previously forecast net income of 15 to 20 cents.

Foot Locker stepped up liquidation of slow-selling products at its U.S. stores at a cost of about $55 million, or 22 cents a share.

Foot Locker also said it would close as many as 250 of its 4,000 stores this year, double the original plan. In addition, most of its 30 Footquarters stores, which feature less expensive shoes than at Foot Locker locations, will be converted into outlet stores, and a few will become Champs Sports units, Brown said.

The shares fell 25 cents, or 1.3%, to $18.80, the lowest price since November 2003.

Foot Locker was started in 1974 as a unit of discount retailer Woolworth Corp.

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