U.S. SHOE WOMEN’S UNIT LOSES $24M

Byline: Valerie Seckler

NEW YORK — U.S. Shoe Corp. said Thursday its women’s retail business had a fourth-quarter operating loss of $24 million on sales of $352 million. The loss includes a $4 million charge to close 14 Pappagallo stores. Sales dropped 3.4 percent to $352 million. Comparable-store sales fell 5.9 percent in the quarter ended Jan. 28. As reported, Luxottica, the Milan-based eyewear maker, launched a $24 cash tender offer last Friday for U.S. Shoe. Luxottica is only interested in U.S. Shoe’s Lenscrafters division and plans to sell off the apparel division, which could be difficult, considering its financial performance. Late Wednesday, Susi Belli, investor relations manager for Luxottica, told WWD, “The big problem is that apparel is a question mark.” However, she added that her firm has “gotten calls from different merchant banks in Italy, telling us they had customers who potentially are interested in U.S. Shoe’s apparel division.” She would not identify them, other than to say they include European retailers.
Since Benetton and Luxottica already have a joint venture to purchase retail businesses, sources have speculated Benetton might be a player. Other reports focus on Next PLC, an English retailer.
In 1994, U.S. Shoe’s women’s division had an operating loss of $49.7 million, compared with a year-ago loss of $41.7 million. Women’s apparel sales fell 7.5 percent to $1.1 billion, and comparable-store sales decreased 5 percent. Luxottica asked U.S. Shoe to set a date by March 10 for a “control share acquisition” meeting, required to consummate a deal, and for a special meeting of U.S. shareholders.