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Thursday, Sep. 17, 1998
All Kinney, Footquarters stores to close
Store located in Padre Staples Mall will close by year's end, spokesman says
By RACHEL BECK
Associated PressNEW YORK -- Just 14 months after closing its struggling Woolworth dimestores, Venator Group Inc. took another step Wednesday to restructure its ailing business by shutting down its 570 Kinney and Footquarters stores.
The latest move will allow the troubled retailer to shed some unprofitable units that are dragging down sales and profits, and dedicate more energy to its core athletic sportswear and footwear chains.
Venator, formerly known as Woolworth Corp., will close 467 Kinney and 103 Footquarters stores, beginning the liquidation process immediately.
(That includes the only Corpus Christi Kinney store at Padre Staples Mall. A Venator spokeswoman told the Caller-Times the store would be closed by year-end, but didn't give a more specific date.
(The spokeswoman said Venator will convert about 60 of the closing Kinney and Footquarters stores to Lady Foot Locker, Kids Foot Locker and Colorado formats. The company hasn't announced what stores will be reformatted and remain open.)
Analysts weren't convinced that the restructuring would be enough to revive Venator, especially with the slump in the athletic footwear market.
``It is a last ditch effort to save a faltering company,'' said Kurt Barnard, a retail consultant and president of Barnard's Retail Trend Report in Upper Montclair, N.J. ``They are hoping that this will help, but I think that remains an open question.''
The Kinney and Footquarters chains employ about 1,400 full-time and 3,200 part-time workers. The company will try to absorb many of the associates into its other divisions, but said there will be some layoffs. No details on job losses were available Wednesday.
Venator expects to take an after-tax charge of $173 million in the third quarter to cover the restructuring, and lowered its quarterly earnings estimates, due in part to weaker-than-expected back-to-school sales.
``This decision really allows us to focus our time, energy and money on businesses that are more profitable,'' chairman and chief executive Roger Farah said in an interview.
``We really believe eliminating businesses that are losing money and not really being able to get to our expectations in the near term certainly helps the company,'' he said.
Venator has struggled in the crowded retail marketplace in recent years, faced with increased competition from supermarkets, discounters and specialty stores.
To revive its ailing business, it has reduced costs and inventory, and sold or disposed of more than 1,200 stores in the last three years, including the 400 Woolworth five-and-dime stores shuttered in July 1997.
As it sold off its parts, Venator has shifted its main focus to its athletic division. But even those stores, including Foot Locker and Champs, have come under pressure amid declining demand for sneakers and other athletic goods.
``They are in a tough position right now because they don't have a horse to run with,'' said Maggie Gilliam, who runs the retail consulting firm Gilliam & Co.
``Foot Locker is an obsolete chain. They have stores that are too small. They haven't changed their concept,'' she said. ``On top of that, the industry is overstored and there are people out there with a better concept.''
Just last week, Venator terminated its agreement to buy The Sports Authority Inc. because of unfavorable conditions in the stock market. Analysts had applauded the merger, which would have given Venator access to the popular big-box retail format.
Under the latest restructuring, Venator will start a new outlet division, which will serve as a clearing house of old inventory and allow its athletic stores to offer only fresh and exclusive merchandise.
The new outlet stores, whose name was not announced, will open in 35 Footquarters store locations and 40 existing Foot Locker and Champs outlets.
Venator stock fell 12 cents to $10.43 on the New York Stock Exchange.
Staff writer Jeffrey Tomich contributed to this report. He can be reached at 886-4316 or by e-mail at tomichj@scripps.comPost your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web