The Finish Line, Inc. announced that following a thorough review of its growth
opportunities, the Company has decided to close Paiva's fifteen stores and
online business by the end of the third quarter. This decision enables the
Company to focus capital on higher return opportunities.
“Consumer response to Paiva has been positive, however, we believe we can
realize more acceptable returns in the near-term by directing resources toward
the Company's core concepts,” said Alan H. Cohen, Chief Executive Officer of
The Finish Line.
In connection with the shut down, the Company expects to record a
pre-tax expense of approximately $21 million over the second and third
quarters of fiscal 2008, consisting of approximately $12 million of long-term
asset costs, $8 million of lease termination costs and $1 million of inventory
write offs. The Company is exploring opportunities to redeploy Paiva
employees to positions in its Finish Line stores and therefore currently
expects any severance costs to be de minimis.