Footstar shares plummet after understated payments
Shoe retailer Footstar Inc. said last Wednesday it will restate almost two years of results after disclosing it had understated payments to suppliers by around $35 million. As a result, the company’s stock has reached an all-time low.
Shares of Footstar, which operates shoe stores within department stores, including bankrupt discount chain Kmart Corp, lost about one-fifth of their value on the day after falling as much as 47%. The company has said it will delay filing its quarterly report with US securities regulators and suspend all of its earnings guidance.
Footstar said it discovered the understatements, most of which came from its athletic segment, during a management review of account reconciliation processes. In a statement, chief executive Mickey Robinson called the error ‘inexcusable and unacceptable’.
