Footstar Provides Update on Management Changes and Declares $1 Distribution

MAHWAH, N.J.--(Business Wire)--
Footstar, Inc. (OTCBB: FTAR) today provided an update as the Company continues
to move forward with the previously announced wind-down of its business.

The Company said that on January 1, 2009, Jon Couchman assumed the role of Chief
Executive Officer and President of Footstar, Inc., while retaining his position
as Chairman of the Board. He succeeds Jeff Shepard, whose employment agreement
with Footstar terminated on December 31, 2008.

Mr. Couchman stated, "The Board of Directors of Footstar thanks Jeff for his 14
years of dedication and service to the company, its employees and shareholders,
and we wish him all the best in the future. I look forward to continuing my
involvement with Footstar in this expanded role as we move ahead with the
wind-down of the business."

Consistent with the Plan of Liquidation adopted by the Footstar Board on May 9,
2008, Footstar is proceeding with the liquidation and dissolution of the
Company, following the expiration of its agreement with Kmart on December 31,
2008 under which it has operated the footwear departments in Kmart stores. Kmart
has agreed to purchase the inventory that was in these Kmart footwear
departments as of December 31, 2008.

Today, the Company announced a $1 per share cash distribution, payment of which
is contingent on receipt of amounts due from Kmart for the inventory. The
distribution would be paid to shareholders of record at the close of business on
January 20, 2009. The distribution is scheduled to be paid on January 27, 2009
assuming receipt of amounts due from Kmart (and could be delayed or rescheduled
in the event such amounts are not timely received). Including the distribution
announced today, since March 27, 2007 the Company has declared cumulative
distributions to shareholders of $7 per share.

The distribution is expected to be treated as a return of capital for tax
reporting purposes, but shareholders will receive further information on Form
1099 after the end of 2009 and are encouraged to consult with their own tax
advisors regarding the tax treatment of the distribution. Under NASDAQ rules, it
is anticipated that Footstar's stock will trade ex dividend the day after the
payment of the dividend. The Company is continuing to prepare for the wind-down
of its business and for the submission of a plan of dissolution to the Company's
stockholders.

Forward-Looking Statements

This release contains forward-looking statements made in reliance upon the safe
harbor provisions of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These statements
may be identified by the use of words such as "anticipate," "estimates,"
"should," "expect," "guidance," "project," "intend," "plan," "believe" and other
words and terms of similar meaning, in connection with any discussion of our
financial statements, business, results of operations, liquidity, future
operating or financial performance and other future events and circumstances.
Factors that could affect our forward-looking statements include, among other
things, our timely receipt of amounts due from Kmart for the purchase of
inventory, our ability to manage the wind-down of our business, the impact of
the payment of the $1.00 per share special distribution on January 27, 2009 on
our future cash requirements and liquidity needs, for any contingencies and
obligations, and the other risks and uncertainties discussed more fully in our
2007 Annual Report on Form 10-K and our 2008 quarterly reports on Form 10-Q.

Because the information in this release is based solely on data currently
available, it is subject to change and should not be viewed as providing any
assurance regarding our future performance. Actual results, performance, events,
plans and expectations may differ from our current projections, estimates and
expectations and the differences may be material, individually or in the
aggregate, to our business, financial condition, results of operations,
liquidity or prospects. Additionally, we do not plan to update any of our
forward-looking statements based on changes in assumptions, changes in results
or other events subsequent to the date of this release, other than as included
in our future required SEC filings, or as may otherwise be legally required.

Media:
Kekst and Company
Wendi Kopsick, 212-521-4867
or
Investors:
Footstar, Inc.
Michael Lynch, 201-934-2577
Chief Financial Officer

Copyright Business Wire 2009