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Tuesday, Sep 26, 2023

Foot Locker Finds Fit in Footaction

Foot Locker Finds Fit in Footaction By SHELLY GARCIA Senior Reporter For years Footaction stores and Foot Locker stores competed side by side in many of the same malls in the San Fernando Valley. The rivalry will continue, but now the two retailers share a common ownership. Footaction, an athletic footwear retailer, was sold to one of its biggest competitors, Foot Locker Inc., in a deal that closed a few weeks ago. Although both store groups sell athletic footwear and both are located in the same shopping malls, Foot Locker plans to retain the Footaction group as a separate brand. Foot Locker acquired about 350 of the Footaction stores from Footstar Inc., which also operates Just For Feet, in a cash deal valued at $225 million. Footstar, which is in Chap. 11 reorganization, had previously shuttered its unprofitable stores, a move that included the Footaction unit located at Westfield Shoppingtown Topanga in Canoga Park. But the Footaction stores in other Valley malls, including Glendale Galleria and Northridge Fashion Center, were included in Foot Locker’s acquisition and will remain open. That means both malls will continue to include both Footaction and Foot Locker. The move is not unlike what’s been done by a number of other retailers that have merged units serving similar customers. Federated Department Stores Inc. operates Macy’s and Bloomingdale’s, for example, in many of the same shopping centers. Foot Locker officials said in a conference call last week that they plan to rearrange the assortments at Footaction so that about 25 percent to 35 percent of the merchandise is distinct from Foot Locker’s inventory. In addition they plan to add sports apparel, which has been accounting for an increasing portion of sales at Foot Locker, to Footaction stores, which have carried very little apparel. Foot Locker has moved quickly to integrate its systems into the Footaction stores. The company said it would be conducting sales to clear out the current inventories over the next few weeks and it plans to have most of the new assortments in place for the back-to-school selling season which begins in mid-July. Footaction stores are expected to add 10 cents a share to Foot Locker earnings in 2005, officials said. The acquisition, Foot Locker’s first since 1997, increases the number of stores the New York-based retailer operates by 10 percent to 3,936 units here and abroad. Footstar was dogged by accounting irregularities for several years before filing for bankruptcy in March. As part of the reorganization plan, the company closed 88 of its Just For Feet units and 77 Footaction stores. Soon after the announcement of the closures, Footstar inked a deal to sell the remaining Footaction stores to Foot Locker.

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