EXHIBIT 99.1
Media Contacts:
Xxxxx Xxxxxxx/Xxxxxxxx Xxxxxx
Kekst and Company
212-521-4800
FOR IMMEDIATE RELEASE
FOOTSTAR ANNOUNCES AGREEMENT
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TO SELL MIRA LOMA DISTRIBUTION CENTER
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--ENTERS EIGHT-YEAR AGREEMENT FOR OUTSOURCING OF DISTRIBUTION--
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WEST NYACK, NEW YORK, JULY 9, 2004 - Footstar, Inc. today announced that it has
entered into a definitive agreement to sell the Company's distribution center in
Mira Loma, California and to outsource certain warehousing and distribution
operations to support the ongoing needs of the Company's Meldisco division.
The Mira Loma facility will be acquired by Alere Property Group LLC , a real
estate company specializing in California industrial real estate. Alere will, in
turn, lease the land and buildings to FMI International LLC ("FMI"), a leading
third-party provider of logistics services to the fashion, footwear and retail
industries. FMI will purchase the materials handling equipment in the Mira Loma
facility, and provide warehousing and distribution services to the Company's
Meldisco division under an eight-year agreement. The total proceeds to Footstar
in connection with the sale is expected to be approximately $20 million. The
transaction is subject to Bankruptcy Court approval and is expected to close as
soon as practicable once Court approval is received. The Company has requested a
hearing date for July 19, 2004.
Xxxx X. Xxxxxxx, Chairman, President and Chief Executive Officer, said, "This
agreement is another step in the re-positioning of the Company as we develop our
plan of reorganization so we can emerge from Chapter 11 and maximize value for
our stakeholders. We are pleased to have secured continuous logistics services
at the Mira Loma distribution center through FMI and are delighted that FMI has
extended employment offers to all associates at the Mira Loma facility. We look
forward to completing the transaction as soon as possible."
FOOTSTAR BACKGROUND
Footstar, Inc. is a leading footwear retailer. As July 3, 2004, the Company
operates 2,441 Meldisco licensed footwear departments nationwide and 36 Shoe
Zone stores. The Company also distributes its own Xxxx XxXx brand of quality
leather footwear through Kmart, Wal-Mart and Shoe Zone stores.
Forward-Looking Statements
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This press release contains forward-looking statements made in reliance upon the
safe harbor provisions of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. These
statements may be identified by their use of words, such as "expect," "plan,"
and other words and terms of similar meaning. Factors that could affect the
Company's forward-looking statements include, among other things: changes
arising from our Chapter 11 filing; our ability to continue as a going concern;
our ability to operate pursuant to the terms of the DIP financing facility; our
ability to obtain Bankruptcy Court approval and any other required approvals
with respect to motions in the Chapter 11 proceeding prosecuted by us from time
to time including but not limited to the sale motion for the Xxxx Xxxx
distribution center; our ability to develop, prosecute, confirm and consummate
one or more plans of reorganization with respect to the Chapter 11 cases; risks
associated with third parties seeking and obtaining Bankruptcy Court approval to
terminate or shorten the exclusivity period that we have to propose and confirm
one or more plans of reorganization, to appoint a Chapter 11 trustee or to
convert the Chapter 11 cases to Chapter 7 cases; our ability to obtain and
maintain normal terms with services providers and vendors, and our ability to
maintain contracts that are critical to our operations; adverse developments
relating to the restatement; the audit of the restatement adjustments for fiscal
years 1997 through 2001; the audit of 2002 and the review of the first three
quarters of fiscal year 2003 by KPMG; negative reactions from the Company's
stockholders, creditors or vendors to the results of the investigation and
restatement or the delay in providing financial information caused by the
investigation and restatement; the impact and result of any litigation
(including private litigation; any action by the Securities and Exchange
Commission or any investigation by any other governmental agency related to the
Company or the financial statement restatement process; additional delays in
completing the restatement or the amendment of previously filed reports or the
filing of reports at the Securities and Exchange Commission; the Company's
ability to manage its operations during and after the financial statement
restatement process; the results of the Company's exploration of strategic
alternatives; the Company's ability to successfully implement internal controls
and procedures that ensure timely, effective and accurate financial reporting;
the continued effect of Kmart store closings on Meldisco; higher than
anticipated employee levels, capital expenditures and operating expenses,
including the Company's ability to reduce overhead and rationalize assets, both
generally and with respect to changes being implemented to address the results
of the investigation and the restatement; adverse results on the Company's
business relating to increased review and scrutiny by regulatory authorities,
media and others (including any internal analyses) of financial reporting issues
and practices or otherwise; any adverse developments in existing commercial
disputes or legal proceedings; volatility of the Company's stock price; and
intense competition in the markets in which the Company competes. Additionally,
due to material uncertainties, it is not possible to predict the length of time
we will operate under Chapter 11 protection, the outcome of the proceeding in
general, whether we will continue to operate under our current organizational
structure, or the effect of the proceeding on our businesses and the interests
of various creditors and security holders.
Because the information herein is based solely on data currently available, it
is subject to change as a result of events or changes over which the Company has
no control or influence, and should not be viewed as providing any assurance
regarding the Company's future performance. Actual results and performance may
differ from the Company's current projections, estimates and expectations and
the differences may be material, individually or in the aggregate, to the
Company's business, financial condition, results of operations, liquidity or
prospects. Additionally, the Company is not obligated to make public indication
of changes in its forward-looking statements unless required under applicable
disclosure rules and regulations.
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