Foot Locker 2007 Annual Report Download - page 5

• Accelerating the closing of unpro-
ductive stores with a focus on cash
fl ow negative locations.
At the same time we took mea-
sures to sustain our fi nancial strength,
we recognized the importance of
returning cash to our shareholders
on an ongoing basis. In line with
this priority, during 2007 we paid out
$77 million, or $0.50 per share, in
dividends to our shareholders and re-
purchased $50 million of our common
stock.
At year end, we had a total of $493
million in cash, cash equivalents and
short-term investments, or approxi-
mately the equivalent of $3 per share.
Our balance sheet debt stood at $221
million, while our book value was
$14.70 per share.
Re-positioning for the Future
We have improved our competitive
position in the athletic retail mar-
ketplace for 2008 by taking a more
conservative approach to inventory
management than we have in the
recent past, and by closing unpro-
ductive stores in 2007. Our overall
2008 strategic priorities will be to
pursue initiatives that we believe
will further enhance comparable
store sales and sales per square
foot at our existing stores. Specifi -
cally, we plan to focus on:
• Providing our customers with
more compelling assortments of
name-brand athletic footwear by
increasing the quantities of unique,
exclusive and limited-distribution
marquee goods in our stores.
• Rebuilding our branded apparel
business with both our existing
and new highly-recognized suppli-
ers while developing more exciting
assortments of our private-label
brands.
• Further differentiating our store
brands from one another by modi-
fying the interior layouts of the
stores, adding new fi xtures to en-
hance the display of our products,
and better defi ning and catering
to the fashion desires of the core
customer for each of our brands.
• Freshening up the look and feel
of our stores through renovations
and remodels. We will concentrate
on improving fl ooring and lighting
and making other modifi cations
that provide a more pleasant shop-
ping experience.
While our near-term strategic focus
will be on improving the profi tability
of our existing stores, we will also
continue to expand our business by
opening new stores in international
markets where we have a proven track
record of success. In addition, we will
pursue new opportunities for growth
in markets where consumer dynam-
ics hold the optimal characteristics
for success in athletic footwear and
apparel retailing. Thus, we expect to
bring the Foot Locker banner to more
countries even as we further penetrate
those markets we currently serve.
In line with this strategy, we plan to
continue to open new stores in West-
ern Europe in 2008. We also expect
our third-party franchisee to continue
to open new Foot Locker stores in the
Middle East this year. We anticipate
pursuing store growth opportunities
in other international markets over
the longer term.
Commitment to our Shareholders
We are committed to providing our
shareholders with an appropriate
return on their investment, and this
requires us to be very thoughtful and
prudent with our capital allocation
decisions. In recognition of this com-
mitment, our Board of Directors
increased our common stock divi-
3
Gross Square Footage
Store Summary 2007 2008
February 3, February 2, Remodeled/ Average Total Targeted
2007 Opened Closed 2008 Relocated Size (thousands) Openings
Foot Locker 1,368 52 145 1,275 61 4,100 5,252 7
Footaction 373 6 23 356 11 4,700 1,662 2
Lady Foot Locker 557 10 41 526 29 2,200 1,177 6
Kids Foot Locker 335 13 27 321 26 2,400 782 6
Foot Locker International 733 14 16 731 34 2,900 2,117 24
Champs Sports 576 22 22 576 35 5,400 3,130 15
Total 3,942 117 274 3,785 196 3,700 14,120 60