Footstar, Inc.announced Thursday that it is beginning inventory clearance sales at 163 underperforming locations that it previously announced it intended to close. These include its 88 Just For Feet stores and 75 of its 428 Footaction stores. Footstar has appointed Hilco Merchant Resources as liquidation agent.
The Company also reported Thursday that it is taking additional steps to refocus its resources around a profitable core business base. Subject to bankruptcy court approval, these include plans to close its three Uprise stores and its nine Shoe Zone stores located in the United States. Uprise and U.S. Shoe Zone were launched in 2002 as test concepts, and the Company has decided that it no longer will support these start-up businesses that have been operating at a loss. Uprise features footwear, apparel and selected additional merchandise for the action sports market. U.S. Shoe Zone, a family footwear retail store that focuses on the Hispanic customer, is an extension of the 30-store Shoe Zone chain that the Company operates in Puerto Rico and the Virgin Islands.
In addition, the Company is relocating and consolidating its Consumer Direct division based in Wisconsin, which was created in 2002 to expand the Company's Internet and catalog sales. Going forward, the Company's e-commerce initiatives will be handled from its Footaction and Meldisco subsidiaries, and the Company will discontinue its catalogs.
Dale Hilpert, Chairman, President and Chief Executive Officer, commented, “We are continuing to move forward with our plans to create a financially stronger Company centered around our core businesses. The closing of underperforming stores and operations is an important part of this process. Unfortunately, these actions will have an impact on certain associates, and we are communicating directly with those affected.”
As previously announced, Footstar expects the store closings to be completed by summer. Affected associates will be paid as normal until their locations close. A list of the 163 closing stores is available at www.footstar.com in the Restructuring Information section.
In order to effect an operational and financial restructuring, Footstar and substantially all of its subsidiaries filed voluntary petitions on March 2, 2004 with the U.S. Bankruptcy Court for the Southern District of New York in White Plains for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
