Foot Locker to buy Delias' CCS

NEW YORK (Reuters) - Athletic shoe and clothing chain Foot Locker Inc (FL.N) said on Monday it plans to buy Delias Inc's (DLIA.O) CCS business for $102 million, as it seeks to boost its appeal with teenage skateboarders.

Delias also said its core brands, dELiA*s and Alloy, should generate positive earnings before interest, depreciation and amortization in the fourth quarter of fiscal 2008 and fiscal 2009, helping to send its shares up 20 percent.

The all-cash deal for CCS is expected to close within 60 days.

"We are pleased with the opportunity to significantly strengthen our balance sheet and achieve the valuation afforded to the CCS brand, particularly in this uncertain economic environment," said Robert Bernard, Delias' chief executive.

"We also intend to continue to prudently manage our business and carefully allocate our capital so that we may best position our company for long-term sustainable growth," he added.

CCS is a direct-to-consumer business that sells skateboard shoes, clothes and accessories through catalogs and the Internet. It is expected to have revenue of $80 million in 2009 and add to Foot Locker's earnings in the first full year of operation, the company said.

Barclays Capital advised Foot Locker while Financo advised Delias on the deal.

Delias, whose main customers are teenagers, said it will not decide how to use the proceeds from the sale until after the end of its fiscal year, in February 2009.

Delias shares were up 55 cents, or 22 percent, at $3.05 on Nasdaq, while Foot Locker shares were down 35 cents, or 2.1 percent, at $16.64.

(Editing by Brian Moss and Steve Orlofsky