SAN FRANCISCO Foot Locker said it was consolidating its management team, cutting jobs and closing 117 stores this quarter as the athletic shoe retailer reorganizes its business under its new chief executive officer.
The company, which has suffered in the downturn, said on Friday that it was combining the management team that oversees its Lady Foot Locker business with the one that manages Foot Locker U.S., Kids Foot Locker and Footaction.
Foot Locker will record an after-tax charge of $3 million, or 2 cents per share, for the fourth quarter, which began on November 1, for cutting about 120 home office and field management positions. The reorganization should result in $10 million in annual expense savings in the upcoming fiscal year, it said.
Richard Johnson, now chief executive officer of Foot Locker Europe, will become president and CEO of Foot Locker U.S., Footaction, Kids Foot Locker and Lady Foot Locker, the company said.
"We expect the consolidation of our Foot Locker businesses under the direction of one management team to help us clarify our Foot Locker family of brands position in the retail marketplace," said Ken Hicks, who was named CEO in June. Hicks was previously president of J.C. Penney Co Inc.
For its current fiscal year, Foot Locker expects to have opened 37 stores, closed 190, and remodeled or relocated 160. As a result, it will close 117 stores in the fourth quarter, many of which are Foot Locker and Lady Foot Locker stores in the United States.
Foot Locker operates about 3,600 stores in North America, Europe and Australia. Its sales have suffered from weak mall traffic and a move by consumers away from athletic shoes.
The company's shares fell 2 cents to $11.80 in morning New York Stock Exchange trading.
(Reporting by Nicole Maestri; Editing by Lisa Von Ahn)