NEW YORK, July 17 /PRNewswire/ -- Woolworth Corporation (NYSE:Z) today announced thatit is exiting its domestic Woolworth general merchandise business. The Company will convertapproximately 100 of its prime United States general merchandise locations to Foot Locker, a newlarger Champs Sports, and other athletic or specialty formats, and will close or sell the remainingstores as well as its distribution center located in Denver, Pennsylvania. The Company presentlyoperates 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 merchandiseoperations to help assure the continuing profitable growth of the Woolworth Corporation and tobetter serve all of our constituencies,' said Roger N. Farah, Chairman of the Board and ChiefExecutive Officer. ``This will enable us to focus on growing our profitable athletic and specialtyretailing formats, including Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sportsand 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 bestefforts and the hard work of the F.W. Woolworth team, the business continued to lose money andit became clear that F.W. Woolworth would be unable, in the foreseeable future, to return toprofitability as well as meet our minimum performance standards. After taking a hard look at thelong-term viability of this business, we have determined that as American consumers turn todifferent '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 anacceptable return on investment.' For the most recent quarter ended April 26, 1997, the F.W. Woolworth division incurred operatinglosses of $24 million on $224 million of sales. In 1996, the division generated sales ofapproximately $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 hasapproximately 3,600 full-time and 5,600 part-time employees. The Company said it will providethese associates with severance and outplacement counseling. The Company expects to record an after-tax charge of approximately $223 million, or $1.66 pershare, in the second quarter of 1997, which will be treated as discontinued operations foraccounting purposes. This charge relates primarily to leasehold and real estate disposition expenses,severance and related benefit costs, inventory liquidation and other related expenses. The Companyexpects the restructuring to generate positive cash flows over the next two years through real estateconversions and dispositions. In connection with the store closings, the Company plans to conduct inventory sales during which allmerchandise 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 globalspecialty retailing formats. A new name will be announced later this year.
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