This is not good news, yet I cannot gauge its impact to the sales and
profits of SRR. I will do the research and report back.
biz.yahoo.com
Company Press Release
Stride Rite, Levi Strauss & Co. Agree to End
Footwear Initiative
LEXINGTON, Mass.--(BUSINESS WIRE)--Oct. 9, 1998--The Stride Rite Corporation (NYSE:SRR - news) today announced that it has mutually agreed with Levi Strauss & Co. to discontinue a line of footwear under the Levi's(R) brand. Stride Rite and Levi Strauss & Co. had entered into a license agreement in April 1997 and the first product line, targeted at young men and boys, was shipped to retailers in July 1998. Stride Rite will record a one-time, pre-tax charge of approximately $5 million ($.07 per share after-tax) in the fourth quarter of its 1998 fiscal year to cover estimated losses on the disposal of inventory and severance costs associated with this decision.
Stride Rite's Chairman and Chief Executive Officer, Robert C. Siegel, commented, ''While revenues from the Levi's business represented less than 3% of Stride Rite's total business in the 1998 third quarter, this was a difficult decision for us. The Levi's(R) brand is obviously a very powerful name in apparel. But, in today's competitive retail marketplace, the Levi's footwear line has not met our sales expectations. Effective today, we have mutually decided with Levi Strauss & Co. to end the license agreement after the Fall 1998 season. As we approach our 1999 fiscal year, the Company will focus its financial and human resources to maximize the profitable growth of the brands that we own, Stride Rite, Keds and Sperry Top-Sider, and to further develop our other licensed footwear opportunities, Tommy Hilfiger for men, women and children and Nine West Kids for girls.''
The Stride Rite Corporation markets the leading brand of high quality children's shoes in the United States. Other footwear products for children and adults are marketed by the Company under well-known brand names, including Keds, Sperry Top-Sider, Tommy Hilfiger, Nine West Kids, Grasshoppers and Street Hot.
This announcement contains forward-looking statements within the meaning of Section 27a of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. The words ''expect'', ''estimate'', and other similar expressions which do not relate solely to historical matters identify forward-looking statements. Undue reliance should not be placed on forward-looking statements because they involve known and unknown risks and uncertainties which may cause actual results to differ materially from anticipated, projected or implied future results. The Company disclaims any responsibility to update these statements.
Contact:
The Stride Rite Corporation
John M. Kelliher, (617) 824-6028
Copyright © 1998 Business Wire. |
