Foot Locker 2004 Annual Report Download - page 11

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9
2000
•Athletic sales surpass $4
billion.
•Corporate offices are moved
to 34th Street.
•21,000-sq.-ft. store on
London's Oxford Street
opens.
2001
•Company changes name to
Foot Locker, Inc.
•Footlocker.com sales reach
$100 million.
•Foot Locker
Foundation is
established.
The Company is very pleased that the Foot Locker family of businesses continues to grow and expand,
as reflected in the purchase of 349 Footaction stores from Footstar, Inc. in May 2004. Included in
the purchase price were the store lease rights, inventory, store fixtures and the Footaction trademark.
Footaction is expected to be an excellent complementary fit with the Company's other athletic
formats. The target customer for Footaction is a 15 to 30 year old male who is influenced by the
“street” and “hip-hop” culture and resides in an urban area. Averaging 4,800 gross square feet,
Footaction stores are large enough to provide a broad array of product choices and are convenient to
their primary customers through locations in key urban markets.
One of the primary reasons that the Company is excited about the prospects of the Footaction
acquistion is the speed and efficiency with which the Footaction stores were integrated into Foot
Locker, Inc.'s existing infrastructure. As a critical part of this process, the stores were retrofitted with
new point-of-sale cash registers similar to those recently deployed in the Company's other operating
divisions. Considerable time and capital were also invested in 2004 to remerchandise the stores with
new and more up-to-date assortments and to introduce an extensive private-label apparel program.
As the Company enters 2005, it believes that Footaction is well positioned to better service its
existing customer base and to attract new consumers. The product offerings are current and fashion-
right, store associates are better trained to service its customers and the Company's infrastructure
will provide strong support for the stores. The Company expects that Footaction will contribute mean-
ingfully to its consolidated operating profit in 2005 and, over time, produce a division profit margin
in line with its other businesses.
Footaction is a very important addition to the Foot Locker family of
businesses and is expected to contribute meaningfully to the Company's
consolidated operating profit in 2005.