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EXHIBIT 99
[WOOLWORTH CORPORATION LETTERHEAD]
NEWS RELEASE
CONTACT: For Investors and Financial
Media:
Juris Pagrabs
(212) 553-7017
For General and Local Media:
Frances E. Trachter
(212) 553-2394
FOR IMMEDIATE RELEASE
WOOLWORTH CORPORATION TO CLOSE ITS U.S.
GENERAL MERCHANDISE OPERATIONS
-- Plans Include Conversion of Approximately 100 Locations to Its
Foot Locker and Champs Athletic Formats --
New York, NY, July 17, 1997-- 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.
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Woolworth Corporation
Press Release
July 17, 1997
Page 2
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 these 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.
Woolworth Corporation currently operates 7,558 stores in North America, Europe,
Australia and Asia, including Foot Locker, Northern Reflections, After Thoughts
and Champs Sports. The Company also operates general merchandise stores in
Germany, Mexico and Canada.
Disclosure Regarding Forward-Looking Statements
This press release contains forward-looking statements which reflect
management's current views of future events and financial performance. These
forward-looking statements are based on many assumptions and factors including
the effects of currency fluctuations, consumer preferences and economic
conditions world-wide. Any changes in such assumptions or factors could produce
significantly different results.
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