Venator Rises on Speculation About Credit Agreement, Stores
New York, Feb. 26 (Bloomberg) -- Venator Group Inc., the former Woolworth Corp., rose 38 percent in
the last week on speculation the largest athletic-shoe and clothing retailer may announce the sale or closing
of some stores or an amended credit agreement, analysts said.
Shares of Venator, operator of the Foot Locker and Champs Sports chains, rose 5/16 to 4 15/16 in trading
of 5.25 million, more than twice the three-month daily average. The shares have rebounded from a record
low of 3 9/16 on Feb. 18. Still, they're down 80 percent in the last year.
Speculation about a pending announcement from Venator was fueled by Chairman and Chief Executive
Roger Farah's scheduled appearance next week at a retail conference sponsored by Bear, Stearns & Co.,
analysts said. At the same time, Venator is approaching a March 19 expiration of a credit waiver from its
banks.
''They may have been successful in getting an increase in their'' revolving line of credit, said analyst John
Shanley of First Security Van Kasper.
Shanley and other analysts dismissed speculation that Farah may be planning to resign at the conference.
''I doubt he'd use a public forum such as an investor conference to announce his resignation,'' he said.
Venator declined to comment on the speculation. Juris Pagrabs, vice president for investor relations,
reiterated that Venator expects to have an amended credit agreement before the March 19 waiver expires.
Venator needed the waiver from its banks because of a wider- than-expected third-quarter loss, as well as
costs related to certain store closures and sales.
Venator is scheduled to report its fourth-quarter earnings on March 10.
The New York-based retailer, which has about 5,900 stores, has been hurt by weak sales and price
markdowns much of the past year, in part because of heightened competition and a move among
consumers toward dressier shoes and clothing.
Venator's biggest problem right now is with the Champs chain, which has seen slow sales of its
private-label merchandise, Shanley said.
The retailer may try to sell that business, or close more stores as it looks to further cut costs or eliminate
unprofitable locations, analysts said.
Donald Trott of Brown Brothers Harriman & Co. said he expects Venator to close as many as 290 Foot
Locker stores in the next two years. It also could open about 300 and remodel or relocate another 350, he
said.
''It certainly wouldn't come as any surprise to me if they tried to walk away from Champs,'' Trott said.
16:59:17 02/26/1999
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