U.S. SHOE CONFIRMS IT’S IN TALKS TO DISSOLVE; MAY SELL OF WOMEN’S
Byline: Valerie Seckler
NEW YORK — U.S. Shoe Corp. said Friday it is talking with unnamed parties to break up the company and possibly sell its $1.2 billion women’s apparel division, which is dominated by Casual Corner.
The announcement confirmed a report in WWD on Jan. 30.
U.S. Shoe also disclosed it has ended efforts to sell its footwear business to Nine West Group, having failed to reach an agreement.
The company’s apparel business has about 1,300 stores.
“Given the strength of our optical and footwear divisions, and the length of time we now project will be required to achieve our objectives in the apparel division, our board has retained our investment banker, James D. Wolfensohn Inc., to evaluate strategic alternatives, including potential business separation strategies,” said Bannus B. Hudson, president and chief executive officer of U.S. Shoe, in a statement.
To this end, “the company has initiated preliminary talks with counterparties,” he added.
Although U.S. Shoe last May rejected a shareholder proposal to break up the company into three units, Hudson said Friday that stronger showings by the company’s footwear and LensCrafters businesses, as well as disappointing apparel results, have changed his thinking.
U.S. Shoe stock took a dive Friday on the New York Stock Exchange, down 3 1/4 to 17 1/4.
Of the failed footwear deal, Hudson said, “We cannot responsibly invest more time and risk more damage to our footwear business from the uncertainty” about this transaction. Last December, Nine West, based in Stamford, Conn., offered $600 million plus warrants for the division.
U.S. Shoe, based in Cincinnati, will report its fourth quarter and year-end results in the second week of March. — Fairchild News Service