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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): October 22, 1998
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VENATOR GROUP, INC.
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(Exact name of registrant as specified in its charter)
New York No. 1-10299 13-3513936
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(State or other jurisdic- (Commission (IRS Employer
tion of incorporation) File Number) Identification No.)
233 Broadway, New York, New York 10279-0003
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(212) 553-2000
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This form 8-K/A amends the Registrant's current Report on Form 8-K filed on
November 9, 1998 with respect to the completion of the disposition of the
Registrant's general merchandise operations in Germany and Austria, to update
the information previously provided in Item 2(b) and to provide the pro forma
financial information required by item 7 of Form 8-K.
Item 2. Acquisition or Disposition of Assets.
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(b) The Registrant received gross cash consideration from the Purchasers of
DM 950 million. The amount of the consideration received by the Registrant was
negotiated by the parties. The Registrant determined not to proceed with the
investment of DM 15 million in the Purchasers that was referred to in the
Registrant's Form 8-K filed on November 9, 1998.
Item 7. Financial Statements and Exhibits.
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(b) Pro Forma Financial Information
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Set forth hereunder is the unaudited pro forma financial information
required to be furnished by the Registrant with respect to the transaction
referred to in Item 2 above:
Pro Forma Condensed Consolidated Balance Sheet
as of August 1, 1998 ..................................... Schedule I
Pro Forma Condensed Consolidated Statements of Operations:
Year Ended January 31,1998 .............................. Schedule II
Twenty-six Weeks Ended August 1, 1998 ................... Schedule III
The following Unaudited Pro Forma Condensed Consolidated Balance Sheet
reflects the historical financial position of the Registrant as of August 1,
1998, and after giving effect to the disposition of the general merchandise
operations in Germany and Austria referred to in Item 2 above as if the sale
transaction had been consummated on August 1, 1998. The Balance Sheet also
reflects the discontinuance of the Specialty Footwear segment as previously
reported. The following Unaudited Pro Forma Condensed Consolidated Statements of
Operations reflect the historical Statements of Operations of the Registrant for
the fiscal year ended January 31, 1998 and the twenty-six weeks ended August 1,
1998 and assume the sale transaction occurred on January 26, 1997. The
Statements of Operations do not include the $270 million before-tax or $193
million after-tax estimated loss on disposal of the Specialty Footwear and the
remaining International General Merchandise discontinued operations, which will
be recorded by the Registrant in the third quarter of 1998.
The Unaudited Pro Forma Condensed Consolidated Financial Statements have
been prepared by the Registrant based upon reasonable assumptions. The Unaudited
Pro Forma Condensed Consolidated Financial Statements presented herein are shown
for illustrative purposes only and are not necessarily indicative of the future
financial position or future results of operations of the Registrant, or of the
financial position or results of operations that would have actually occurred
had the transaction been in effect as of the date or for the periods presented.
In addition, it should be noted that the Registrant's financial statements will
reflect the sale of the Registrant's general merchandise operations in Germany
and Austria on October 22, 1998, the Closing date.
The Unaudited Pro Forma Condensed Consolidated Financial Statements should
be read in conjunction with the Consolidated Financial Statements and Notes
Thereto contained in the Registrant's Form 10-K for the fiscal year ended
January 31, 1998 and Form 10-Q for the period ended August 1, 1998.
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Schedule I
PRO FORMA FINANCIAL INFORMATION
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VENATOR GROUP, INC.
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PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF AUGUST 1, 1998
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(UNAUDITED)
(in millions)
Pro Forma Adjustments
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International
General Specialty
Historical Merchandise Footwear Other Pro Forma
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(a) (b)
ASSETS
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Current Assets
Cash and cash
equivalents ......... $ 77 $ 80 $ (4) $ 57 (c) $ 58
Merchandise inventories 1,406 272 139 995
Other assets 238 23 19 196
Net assets of discontinued
operations .......... -- -- -- 198 (d) 198
_____ ____ ____ ____ _____
1,721 375 154 255 1,447
Property and equipment, net 1,214 386 40 788
Deferred charges and other
assets ............... 716 69 10 (19)(f) 618
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$ 3,651 $ 830 $ 204 $ 236 $ 2,853
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities
Short-term debt ....... $ 451 $ -- $ -- $(451)(c)(e) $ --
Accounts payable and
accrued liabilities . 797 133 35 52 (g) 681
Reserve for discontinued
operations .......... -- -- -- 229 (h) 229
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1,248 133 35 (170) 910
Long-term debt and obligations
under capital leases ... 536 26 1 509
Deferred taxes and other
liabilities .......... 604 209 9 386
Total shareholders' equity 1,263 462 159 406 1,048
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$ 3,651 $ 830 $ 204 $ 236 $ 2,853
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(a) To eliminate the assets and liabilities included in the balance sheet of
the Registrant's International General Merchandise business as of August 1,
1998.
(b) To eliminate the assets and liabilities included in the balance sheet of
the Registrant's Specialty Footwear business as of August 1, 1998.
(c) To reflect the $508 million net proceeds from the sale of the Registrant's
general merchandise operations in Germany and Austria. Gross proceeds of DM
950 million were translated using an exchange rate of .59, the rate in
effect at the Closing date.
(d) Includes the net assets of Specialty Footwear discontinued operations at
August 1, 1998 and the other International General Merchandise net assets
to be disposed of.
(e) To reflect the reduction of debt from the proceeds of the general
merchandise operations in Germany and Austria.
(f) To reflect deferred tax assets ($42 million) related to the Specialty
Footwear one time charge offset by the realization of other deferred tax
assets ($61 million).
(g) To reflect transaction costs ($13 million) and income tax liabilities ($135
million), related to the sale of the Registrant's general merchandise
operations in Germany and Austria, offset by the tax benefit related to the
Specialty Footwear one-time charge ($35 million) and the realization as a
result of these transactions of other deferred tax assets ($61 million).
(h) To reflect the impact of the one-time pre-tax charge of $198 million for
Specialty Footwear and $31 million for International General Merchandise
primarily related to leasehold and real estate, inventory liquidation and
severance. The related tax benefit of $77 million is included as deferred
charges and other assets ($42 million) and current liabilities ($35
million).
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Schedule II
PRO FORMA FINANCIAL INFORMATION
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VENATOR GROUP, INC.
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PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JANUARY 31, 1998
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(UNAUDITED)
(in millions)
Pro Forma Adjustments
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International
General Specialty
Historical Merchandise Footwear Other Pro Forma
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(a) (b)
Sales $ 6,624 $ 1,481 $ 531 $ $ 4,612
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Costs and expenses
Cost of sales ........ 4,568 1,042 399 3,127
Selling, general and
administrative expenses 1,535 394 133 1,008
Depreciation and
amortization .... 168 36 10 122
Interest expense, net 44 3 6 (30) (c) 5
Other income ......... (29) (13) (3) (13)
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6,286 1,462 545 (30) 4,249
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Income (loss) from continuing
operations before income
taxes ............... 338 19 (14) 30 (c) 363
Income tax expense (benefit) 125 11 (6) 11 131
Income (loss) from continuing _____ _____ ____ ____ _____
operations ........ $ 213 $ 8 $ (8) $ 19 $ 232
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Basic earnings per share:
Income from continuing
operations ......... $ 1.58 $ 1.72
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Weighted-average common shares
outstanding .......... 134.6 134.6
Diluted earnings per share:
Income from continuing
operations ......... $ 1.57 $ 1.71
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Weighted-average common shares
assuming dilution .... 135.8 135.8
(a) To eliminate the operations of the Registrant's International General
Merchandise business for the year ended January 31, 1998.
(b) To eliminate the operations of the Registrant's Specialty Footwear business
for the year ended January 31, 1998.
(c) Represents estimated interest savings at 6 percent from the $508 million
net proceeds from the sale of the general merchandise operations in Germany
and Austria, tax effected at 37 percent.
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Schedule III
PRO FORMA FINANCIAL INFORMATION
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VENATOR GROUP, INC.
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PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWENTY-SIX WEEKS ENDED AUGUST 1, 1998
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(UNAUDITED)
(in millions)
Pro Forma Adjustments
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International
General Specialty
Historical Merchandise Footwear Other Pro Forma
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(a) (b)
Sales $ 2,931 $ 608 $ 222 $ 2,101
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Cost and expenses
Cost of sales ..... 2,098 433 181 1,484
Selling, general and
administrative expenses 771 175 71 525
Depreciation and
amortization ....... 91 16 5 70
Interest expense, net 21 -- 4 (15) (c) 2
Other income ...... (22) (3) -- (19)
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2,959 621 261 (15) 2,062
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Income (loss) from continuing operations
before income taxes .. (28) (13) (39) 15 39
Income tax expense (benefit) (10) (5) (15) 6 16
Income (loss) from continuing _____ ____ ____ ___ _____
operations ........... $ (18) $ (8) $ (24) 9 $ 23
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Basic earnings per share:
Income (loss) from
continuing operations $ (0.13) $ 0.17
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Weighted-average common
share outstanding .... 135.3 135.3
Diluted earnings per share:
Income (loss) from
continuing operations $ (0.13) $ 0.17
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Weighted-average common
shares assuming dilution 135.3 0.9 (d) 136.2
(a) To eliminate the operations of the Registrant's International General
Merchandise business for the period ended August 1, 1998.
(b) To eliminate the operations of the Registrant's Specialty Footwear business
for the period ended August 1, 1998.
(c) Represents estimated interest savings at 6 percent from the $508 million
net proceeds from the sale of the general merchandise operations in Germany
and Austria, tax effected at 37 percent.
(d) To reflect dilution from the Registrant's stock options.
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SIGNATURES
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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 being hereunto duly authorized.
VENATOR GROUP, INC.
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(Registrant)
Date: November 23, 1998 BY: /s/ Reid Johnson
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Reid Johnson
Senior Vice President and
Chief Financial Officer
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