SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 22, 2000
-------------
FOOTSTAR, INC.
- -------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 1-11681 22-3439443
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
933 MacArthur Boulevard, Mahwah, New Jersey 07430
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (201) 934-2000
--------------
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
Just For Feet Integration Ahead of Plan and Anticipated Second Quarter Earnings
Announcements.
On May 22, 2000, Footstar, Inc. ("Footstar" or the "Company") announced
that its integration of the Just For Feet stores acquired last March is ahead of
plan and that the Company is in final negotiations to add up to 15 new Just For
Feet stores in Fall 2000. Footstar also announced that it expects to exceed
current analysts' estimates for the second fiscal quarter 2000 and,
consequently, fiscal year 2000.
Integration Ahead of Plan. Since completing its acquisition on March 7,
Footstar has replenished inventory in the Just For Feet stores and integrated
the chain into Footstar's existing infrastructure and services network.
Fresh inventory entering stores at a faster than anticipated pace has
resulted in sales exceeding plan in April and May. Staffing is almost complete
and the new Just For Feet headquarters in Mahwah, New Jersey opened on May 22,
2000. Back office support functions have been integrated into the Footstar
Services Network and the final systems conversion is scheduled for June 2000,
two months ahead of schedule. Also, beginning in June, product distribution for
the new stores will be handled by Footstar's distribution facility in Gaffney,
South Carolina. The Company plans to wind down Just For Feet's former
headquarters facility in Birmingham in July and thereafter sell the building.
New Superstore Locations. The Company also announced that it is in
final negotiations to complete store lease agreements with several landlords to
add up to 15 new superstore locations in several existing markets, including
Miami, Dallas and Phoenix, and in new markets, including San Diego and Fresno,
California, Philadelphia and Richmond. All but two of these new stores were
previously operated by Just For Feet. The Company plans to open most of the new
stores in the second half of 2000. The Company expects that capital expenditures
in 2000 should not exceed $45 million, including the disbursements associated
with the new stores.
New Bank Facility. The Company also reported that it plans to close
this week on its new credit facility to provide for a $325 million three-year
credit facility to replace its existing $300 million credit facility.
Expectations for Second Quarter and Fiscal 2000. The Company reported
that its sales for May were ahead of plan in all businesses. As a result of this
performance and the integration of Just For Feet, Footstar expects to exceed
current analysts' earnings expectations for the second fiscal quarter 2000 and
fiscal year 2000. The Company expects second quarter diluted earnings to be
between $0.65 and $0.70 per share.
Footstar, headquartered in Mahwah, New Jersey, is a leading footwear
retailer. As of April 29, 2000, the Company's Footaction division, headquartered
in Irving, Texas, operated 552 mostly mall-based stores in 44 states, Puerto
Rico and the U.S. Virgin Islands. The Company's Just For Feet division,
headquartered in Mahwah, New Jersey, operated 79 superstores in the southern
half of the United States. Both divisions, which comprise the Company's athletic
segment, sell branded athletic footwear and apparel. The Company's Meldisco
division is a leader in the discount footwear segment, operating 2,484 licensed
footwear departments, primarily in Kmart stores.
Except for the historical information contained herein, the matters
discussed in this Current Report are forward looking statements including with
respect to earnings, sales and capital expenditure expectations that involve
risks and uncertainties that may cause actual results to differ from those
expressed in any of the forward looking statements. Such risks and uncertainties
include, but are not limited to, uncertainties related to the Company's ability
to execute its integration plans, the effect of competitive products and
pricing, consumer demand for footwear, unseasonable weather, consumer acceptance
of the Company's merchandise mix and retail locations, the availability of
products, and the other risks detailed in the Company's Securities and Exchange
Commission filings. The Company undertakes no obligation to update forward
looking statements to reflect events or circumstances after the date such
statements were made.
A copy of the press release dated May 22, 2000 is attached hereto as
Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit 99.1 Press Release dated May 22, 2000
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FOOTSTAR, INC.
CARLOS E. ALBERINI
Dated: May 22, 2000 By: _______________________________
Name: Carlos E. Alberini
Title: Senior Vice President and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit 99.1 Press Release dated May 22, 2000
Investor Contact: Carlos Alberini Media Contact: Wendi Kopsick
Sr. Vice President & CFO Jim Fingeroth
Kathy Guinnessey Kekst and Company
Vice President, Finance (212) 521-4800
Footstar, Inc.
(201) 760-4008
FOR IMMEDIATE RELEASE
FOOTSTAR REPORTS JUST FOR FEET INTEGRATION AHEAD OF PLAN
-Company Expects to Open Up to 15 New Superstores in the Fall 2000-
-Anticipates Second Quarter Earnings per Share to
Exceed Analysts' Expectations-
MAHWAH, NEW JERSEY, May 22, 2000--Footstar, Inc. (NYSE:FTS) announced today that
its integration of the Just For Feet stores acquired last March is ahead of plan
in all respects and that the Company is in final negotiations to add up to 15
new Just For Feet stores in Fall 2000. Footstar also said today that based on
May sales trends in all of its businesses, it expects to exceed current
analysts' estimates for the second quarter and, consequently, fiscal 2000.
Integration Ahead of Plan
- -------------------------
Since completing its acquisition on March 7, Footstar has moved quickly to
replenish inventory in the Just For Feet stores and to integrate the chain into
Footstar's existing infrastructure and services network.
Fresh inventory has been flowing into the stores at a faster than anticipated
pace resulting in sales exceeding plan consistently in April and May. Staffing
is virtually complete and the new Just For Feet headquarters in Mahwah opened
today. Back office support functions have already been integrated into the
Footstar Services Network and the final systems conversion is scheduled for June
2000, two months ahead of the original plan. Also beginning in June, product
distribution for the new stores will be handled from Footstar's state-of-the-art
distribution facility located in Gaffney, South Carolina. The Company plans to
wind down Just For Feet's former headquarters facility in Birmingham in July and
to subsequently sell the building.
Mr. Mickey Robinson, Chairman and Chief Executive Officer of Footstar commented,
"We are very pleased with the progress we have made integrating Just For Feet.
The business and most importantly, the customer, have responded well to the
fresh inventory and the new marketing initiatives. With integration plans ahead
of schedule, we are also reducing the cost structure of the Just For Feet
business sooner than anticipated."
<PAGE>
New Superstore Locations
- ------------------------
The Company is in final negotiations to complete store lease agreements with
several landlords to add up to 15 new superstore locations in several markets,
including some in its existing markets of Miami, Florida, Dallas, Texas, and
Phoenix, Arizona and some in new markets, including San Diego and Fresno,
California, Philadelphia, Pennsylvania and Richmond, Virginia. All but two of
these new stores were previously operated by Just For Feet. The Company plans to
open most of the new stores in the second half of the year. Capital expenditures
in 2000 should not exceed $45 million, including the disbursements required for
the new stores.
Mr. Robinson continued, "We are very excited about the opportunities to backfill
existing markets and reenter markets where Just For Feet previously created
strong customer relationships and built a healthy business. Under the newly
negotiated terms, we believe the new stores have the potential to increase
Footstar's earnings for 2001."
New Bank Facility
- -----------------
The Company plans to close this week on its new three-year credit facility for
$325 million with a consortium of banks, led by FleetBoston Financial. This
transaction will replace its existing $300 million credit facility.
Expectations for Second Quarter
- -------------------------------
Separately, the Company reported that its sales for May continued to trend ahead
of plan in all businesses. As a result of this performance and the integration
of Just For Feet discussed above, Footstar now expects to exceed current
analysts' earnings expectations for the second fiscal quarter. The Company
currently expects second quarter diluted earnings to be between $0.65 and $0.70
per share.
Mr. Robinson concluded, "We are very pleased with our business trends and sales
momentum. We expect May sales results will exceed our plans in each business,
while margin and expenses should be on plan. Consequently, we see opportunities
for earnings upside in the second quarter and the year."
Footstar, Inc., headquartered in Mahwah, New Jersey, is a leading footwear
retailer. As of April 29, 2000, the Company's Footaction division, headquartered
in Irving, Texas, near Dallas, operated 552 mostly mall-based stores in 44
states, Puerto Rico, and the U.S. Virgin Islands. The Company's Just For Feet
division, headquartered in Mahwah, New Jersey, operated 79 superstores located
in the Southern half of the country. Both divisions, which comprise the
Company's athletic segment, sell branded athletic footwear and apparel. The
Company's Meldisco division is a leader in the discount footwear segment,
operating 2,484 licensed footwear departments, primarily in Kmart stores.
Except for the historical information contained herein, the matters discussed in
this release are forward looking statements including with respect to earnings,
sales and capital expenditure expectations that involve risks and uncertainties
that may cause actual results to differ from those expressed in any of the
forward looking statements. Such risks and uncertainties include, but are not
limited to, uncertainties related to the Company's ability to execute its
integration plans, the effect of competitive products and pricing, consumer
demand for footwear, unseasonable weather, consumer acceptance of our
merchandise mix and retail locations, the availability of products, and the
other risks detailed in the Company's Securities and Exchange Commission
filings. The Company undertakes no obligation to update forward looking
statements to reflect events or circumstances after the date such statements
were made.
###
