US footwear retailer sales hurt by stay-at-home consumers
New York-based Footstar Inc. – the company behind the Footaction and Just For Feet athletic shoe chains - last week posted a 7.5% decline in third-quarter profits, blaming aggressive merchandising by its competitors and fewer consumers venturing out in the wake of the September 11 terrorist attacks.
Despite the lower-than-expected results, Chairman and Chief Executive Mickey Robinson was bullish, saying the benefits of company’s previously-announced strategy of accelerating the closure of its underperforming athletic shoe stores would begin to come through in early fiscal 2002.
``By eliminating underperforming stores and upgrading merchandise assortments and in-store displays, Footstar will have a healthier business base and enhanced prospects going forward,'' Robinson said in a statement.
Industry-watchers say that although the company's results were in line with expectations, it now needs to urgently address the challenge of a rapidly softening market and aggressive in-store merchandising by rivals such as Footlocker, the athletic footwear division of Venator Group Inc.
Shares of Footstar on Thursday were down slightly in mid-morning trading on the New York Stock Exchange, off 14 cents at $35. The company’s stock has also lost around 5% of its value since September 11. By comparison, shares of Venator Group were trading at $15.20, around 8.5% off their pre-September 11 levels.
Footstar’s earnings before restructuring charges were $22.3 million, or $1.08 a share, compared with $24.1 million, or $1.19 cents a share, a year earlier.
