Footstars sudden announcement last week that they may file for bankruptcy protection if they couldnt sell off assets and/or get new financing had everyone scrambling on Thursday at the show. While we didnt find any vendors that would readily admit that the company had been slow pay or that shipments to Footstar had been curtailed, it is clear when shopping their stores that they are not getting full treatment from a number of brands.
Sources we spoke with still saw the JFF leases as a major holdup in any sale of the Athletic unit and some intimated that the bankruptcy threat is often a play to get landlords to play ball on lease negotiations. After all, if they can get ten cents on the dollar out of the leases, it is still better than a Chapter 11 where they may see nothing.
Still, there was talk of a management buyout of Footaction, a Lampert buyout of Meldisco, and a Footaction sale to The Finish Line or Foot Locker that kept everyone buzzing through the end of the show. While a FINL asset buy makes sense from a geographic standpoint, some sources point to the fact that FINL is already making strong strides in the areas covered by the Footaction leases.
The other school of thought is that Foot Locker could use the stores as a premium branding location that would see stronger Nike support with marquee product than the Foot Locker or Champs stores hope to see in the near future.
The company also announced that its lenders syndicate, led by Fleet Financial, had extended the deadline for filing their delayed financials to February 27, 2004.
>>> We hate to state the obvious, but this will all happen when it happens and speculation by us or anyone else is just that — speculation
