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NEW YORK, July 17 /PRNewswire/ -- Woolworth Corporation (NYSE:Z) today announced that
it is exiting its domestic Woolworth general merchandise business. The Company will convert
approximately 100 of its prime United States general merchandise locations to Foot Locker, a new
larger Champs Sports, and other athletic or specialty formats, and will close or sell the remaining
stores as well as its distribution center located in Denver, Pennsylvania. The Company presently
operates 400 stores in the United States under the F.W. Woolworth name.

``We made the very difficult decision to close our domestic F.W. Woolworth general merchandise
operations to help assure the continuing profitable growth of the Woolworth Corporation and to
better serve all of our constituencies,' said Roger N. Farah, Chairman of the Board and Chief
Executive Officer. ``This will enable us to focus on growing our profitable athletic and specialty
retailing formats, including Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sports
and the Northern Group of apparel stores.'

``This Company has invested significant resources in trying to revitalize the F.W. Woolworth chain,
including time, money and management's attention,' Mr. Farah stated. ``However, despite our best
efforts and the hard work of the F.W. Woolworth team, the business continued to lose money and
it became clear that F.W. Woolworth would be unable, in the foreseeable future, to return to
profitability as well as meet our minimum performance standards. After taking a hard look at the
long-term viability of this business, we have determined that as American consumers turn to
different 'large-box' mass merchandise and specialty retailing formats to meet their shopping needs,
the marketplace simply could not support Woolworth's form of general merchandise business at an
acceptable return on investment.'

For the most recent quarter ended April 26, 1997, the F.W. Woolworth division incurred operating
losses of $24 million on $224 million of sales. In 1996, the division generated sales of
approximately $1.0 billion and an operating loss before non-recurring items of $37 million.

Tracing its origins to 1879, the F.W. Woolworth Co., a subsidiary of Woolworth Corporation,
operates general merchandise stores in 35 states, Puerto Rico and the U.S. Virgin Islands, and has
approximately 3,600 full-time and 5,600 part-time employees. The Company said it will provide

associates with severance and outplacement counseling.

The Company expects to record an after-tax charge of approximately $223 million, or $1.66 per
share, in the second quarter of 1997, which will be treated as discontinued operations for
accounting purposes. This charge relates primarily to leasehold and real estate disposition expenses,
severance and related benefit costs, inventory liquidation and other related expenses. The Company
expects the restructuring to generate positive cash flows over the next two years through real estate
conversions and dispositions.

In connection with the store closings, the Company plans to conduct inventory sales during which all
merchandise will be offered to customers at significantly reduced prices. In addition, the stores'
fixtures, including display cases, soda fountain items, signage and furniture, will be offered for sale.
The Company expects to close the stores over the next several months.

The Company also said that it intends to change its corporate name to better reflect its global
specialty retailing formats. A new name will be announced later this year.
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