Woolworth successor cutting jobs, stores

Venator will focus on athletic business, close Northern Group

March 30, 2001|By BLOOMBERG NEWS

NEW YORK - Venator Group Inc. said yesterday that it's eliminating more than 3,000 jobs and closing 323 stores nationwide as the largest retailer of athletic shoes prepares to sell the money-losing Northern Group business.

The store closings will cut about 700 full-time and 2,300 part-time positions, the company formerly known as Woolworth Corp. said in a statement. Venator also will trim its Northern Group corporate work force by 103 jobs to 173. The Northern Group's remaining 370 stores in Canada will be reorganized and sold.

The casual-clothing unit is the last nonathletic business owned by Venator, which is focusing on expanding its Foot Locker and Champs Sports chains. Since 1994, Venator has reduced its work force by more than half and sold dozens of smaller, less-profitable businesses, including the San Francisco Music Box, Randy River, Team Edition and Going to the Game chains.

"Everyone's known for years that this business would disappear," said Jefferies & Co. analyst Donald Trott.

Shares of the New York-based retailer rose 65 cents, or 5 percent, to close at $13.70 yesterday. They've risen 66 percent in the past year.

Venator has 49,000 employees worldwide, including 13,000 full-time and 27,000 part-time workers in the United States, and 3,600 stores in 14 countries.

U.S. Northern Group stores from Alaska to New York will be closed by the end of the second quarter, the company said. Liquidation sales begin immediately.

Northern Group sells what First Security Van Kasper analyst John Shanley calls "clothes for blue-haired ladies" and doesn't appeal to the middle-aged customer whom the chain is trying to reach. The U.S. unit was losing money, but the Canadian portion of the chain is "moderately" profitable, he said.

"Nobody would touch this thing with the U.S. stores intact," Shanley said. He expects the buyer to be either a Canadian company or a U.S. retailer such as Talbots Inc. that wants to expand across the border.

Venator said in January that it would sell the Northern Group. In its fiscal fourth quarter, which ended Feb. 3, Venator had a loss from its discontinued Northern Group operations of $34 million, or 25 cents a share, and took a charge of $296 million, or $2.12, for the estimated loss from its planned sale.

Shanley said he expects Venator to be able to recoup a portion of this charge from the sale.

Venator may be able to boost its share of the U.S. athletic-shoe market to between 21 percent and 23 percent by the end of this year, Shanley said. The company has 19 percent of the market now. Its closest competitor, Footstar, has about 9 percent.

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