Finish Line, Just For Feet, Footstar Fall on Price Concerns
Bloomberg News
August 5, 1998, 10:46 a.m. PT
Finish Line, Just For Feet, Footstar Fall on Price Concerns
Indianapolis, Aug. 5 (Bloomberg) -- Shares of athletic shoe
retailers Finish Line Inc., Footstar Inc. and Just For Feet Inc.
fell for a second day on concern that industry leader Venator
Group Inc. is cutting prices to spur sales.
Venator, which operates the Foot Locker and Champs Sports
stores, appears to be increasing sales promotions to clear out
excess inventories, analysts said. That could take away sales
from other sneaker chains or force them to cut prices.
Sneaker sellers have been struggling the past year as
consumers switched to hiking boots and dressier shoes such as
Hush Puppies. The concern about heightened price competition from
Venator comes during the crucial back-to-school selling season.
''The word on the Street is that Venator has become more
aggressive promotionally, which has taken the industry and turned
it upside down today,'' said analyst Marcia Aaron of BT Alex
Brown Inc.
New York-based Venator couldn't immediately be reached for
comment.
Indianapolis-based Finish Line fell 5 3/8, or 28 percent, to
14 1/8 in early afternoon trading. The shares fell 9.8 percent
yesterday.
Birmingham, Alabama-based Just For Feet fell 2, or
9.6 percent, to 18 3/4, after dropping 8.3 percent yesterday.
Mahwah, New Jersey-based Footstar Inc., which operates the
Footaction chain, fell 2 3/16, or 6.1 percent, to 33 13/16 after
dropping 5 percent yesterday.
Venator fell 1/4 to 12 13/16. Its shares are down 36 percent
this year, as it's struggled with weak sales and losses.
Foot Locker's excess inventories stemmed from apparent
merchandising and purchasing mistakes, said analyst Brent Rystrom
of Piper Jaffray Inc.
''It's a short-term problem and will probably last five or
six weeks,'' he said.
Venator is also in the midst of a bidding war for Sports
Authority Inc., the top seller of sporting goods such as sneakers
and treadmills.
New York-based Venator agreed May 7 to swap 0.8 share for
each Sports Authority share. Gart Sports Co. later made a rival
$20-a-share cash offer for a majority stake in Sports Authority.
Venator shareholders have pushed for Venator to come back with a
cash offer of its own. Investors had criticized the stock offer
because of potential dilution in their shares, pushing instead
for a cash bid.
Fort Lauderdale, Florida-based Sports Authority fell 1/8 to
11 1/16. Denver-based Gart fell 1/8 to 16 1/4.
--Anne Pollak in the Princeton newsroom (609) 279-4043, with
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