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Non-Tech : Just For Feet (FEET) -- Ignore unavailable to you. Want to Upgrade?

To: Don Dorsey who wrote (604)	7/7/1998 9:15:00 PM
From: lanac	Read Replies (1) \| Respond to of 750

July 7, 1998 ATHLETIC SHOE RETAILERS ISSUE WARNINGS NEW YORK -(Dow Jones)-Two of the largest retailers of athletic shoes and sporting gear issued dour warnings Tuesday, saying that sales of sneakers have been dragging, and the weak Asian economy has kept tourists from traveling abroad and buying their shoes. Venator Group Inc. - which owns more than 3,000 Foot Locker, Lady Foot Locker and Champs Sports stores - said it would report a loss for its current second quarter because of unexpectedly weak sales in May and June. And Sports Authority Inc., which Venator is trying to acquire, said its earnings will be well below expectations and year-ago levels. Venator, formerly known as Woolworth Corp., said its loss will total 5 cents to 10 cents a share. Four analysts surveyed by First Call had expected the company to earn 21 cents a share in the quarter, which ends Aug. 1. Venator said the oversupply of athletic footwear, principally closeout inventories, created an aggressive promotional selling environment that hurt sales and gross margins. The retailer added that the lack of Asian tourism in its Hawaii, Guam and California stores and an increased competitive environment in Puerto Rico contributed to the softness in its business. Similarly, Sports Authority blamed continued soft sales in key categories, negative pressure on gross margin, and the economic situation in Japan. The company said it will post earnings of 12 cents to 14 cents a share, less than half the year-earlier 30 cents a share. Eleven analysts surveyed by First Call had a mean estimate of 25 cents a diluted share for Sports Authority's quarter, which ends this month. The company sees sales of about $430 million for the quarter, with same-store sales falling 2% to 3%. The company recorded sales of $383.3 million for the year-ago quarter. Venator gave no figures regarding its sales for May and June, except to describe them as "disappointing." The New York-based company said that if current sales trends continue through the second half of the year, it expects to report earnings between $1.10 a share and $1.20 a share for the year, which would be far below expectations for earnings of $1.72 for the year. Venator said its outlook for the year doesn't include its possible acquisition of Sports Authority, based in Fort Lauderdale, Fla. When Venator offered to buy Sports Authority in May, it bid 0.8 of a Venator share for each Sports Authority share. Based on Monday's closing price of $21, each of Sports Authority's outstanding 31.6 million shares would have fetched $16.80, for a total transaction price of about $531 million. But stunned investors Tuesday sent Venator's shares reeling. At early afternoon, Venator (Z) shares were down $2.50, or 12%, at $18.50 on the New York Stock Exchange. At that price, the value of its takeover bid dropped to about $460 million. The offer is being challenged by Gart Sports Inc., which last week offered to buy 70% of Sports Authority for $20 a share, or about $442.4 million. The remaining 30% of the company would represent 51% of the combined new company, and the company said the public shares would have a value of at least $20 a share. Shares of Sports Authority were also lower Tuesday. In afternoon trading, the Nasdaq-listed issue (TSA) was down $2.063, or 13%, at $14.50 on volume of more than one million shares, more than double the daily average of about 456,000. Neither Gart nor Venator issued a statement regarding their bids for Sports Authority following Tuesday's announcements. Venator said it remains "encouraged" about the second half of the year because of improving vendor over-supply trends, new merchandise assortments for the back-to-school season and contributions for new and remodeled stores.