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Document 36 of 67.

Copyright 1998 Information Access Company,
a Thomson Corporation Company;
ASAP
Copyright 1998 Fairchild Publications Inc.
Footwear News

July 13, 1998

SECTION: No. 28, Vol. 54; Pg. 9; ISSN: 0162-914X

IAC-ACC-NO: 20943728

LENGTH: 539 words

HEADLINE: THE FOOT LOCKER FACTOR; Company Profile

BODY:
When athletic-retail executives talk about the competition, the conversation eventually turns to one chain: Foot Locker, owned by Venator Group Inc., formerly Woolworth Corp. The competition isn't just for customers; it's also for leases and allocated product. When something happens at Foot Locker, it can affect the entire industry.

At about 3,650 stores -- including 2,000 Foot Lockers, 700 Lady Foot Lockers, 250 Kids Foot Lockers and 700 Champs stores -- Venator's athletic group is nearly everywhere in and outside of malls. Some see it as a struggling giant, whose comps have been dropping. But it is still the only company Nike listed on SEC filings as accounting for over 10 percent of its business. Foot Locker accounted for 12 percent of Nike's branded sales in 1997. But despite its market share in the athletic footwear arena, it also faces huge obstacles.

"Venator Group operates 3,000 athletic footwear stores in the U.S. in virtually every shopping mall," said Bernard Sosnick, managing director, Genesis Merchant Group Securities. "But the stores are small."

Venator Group's most obvious impact has been simply by taking over others. The company acquired Koenig's, Athletic Fitters and Champs and made a bid to take over The Sports Authority. It also may have added steam to others' acquisitions. Soon after what Gruntal & Co. analyst Mike Conn called the "blockbuster" bid for The Sports Authority, Just For Feet announced its takeover of Sneaker Stadium.

"From what I'm hearing, they're putting in a lot of their own branded product," said Just For Feet's Harold Ruttenberg of Venator. "That to me is good for me and my vendors. We might have some special makeups. That's not a big part of our business."

Venator still gets top deals from vendors, but now others are big enough to get more attention and perks. While Foot Locker still gets key product, other chains are getting their foot in the door.

"When Nike released Air Jordan in 1994, Woolworth would get preferential treatment. Foot Locker became the fashion outlet for athletic footwear," said Sosnick. "Now Finish Line and Footaction get the product at about the same time in the malls."

Foot Locker is a competitor for mall space. Other companies have formed informal alliances that have opened the door to major malls. According to sources, Nordstrom helped Finish Line get into key malls. Nordstrom denies any connection with Finish Line.

"The ones who hold the cards are the mall owners. Major mall owners have given Finish Line selective positions in its malls," said Sosnick. "Why not run with the horses who are proven winners?"

Still, Foot Locker has been focused on building a powerhouse, more than raking in strong sales for the short term. And the Foot Locker factor soon may extend much further as Venator revs up its Lady Foot Locker and Kids Foot Locker formats, creating triplexes linking all three.

But in some other respects, Foot Locker may be its competition's best friend and resource. Venator often hires from other industries or other parts of retail. But many top executives in footwear retail, including Foot Action USA President Ralph Parks and senior vice president Keith Daily, come from Foot Locker.

LANGUAGE: ENGLISH

IAC-CREATE-DATE: July 24, 1998

LOAD-DATE: July 25, 1998