Fitness financials: Play It Again parent, Footstar bankruptcy, Amer's new financial reporting standards

Foot Locker to acquire Footaction stores from bankrupt Footstar
Withdrawing its lot from the auction block, bankrupt retailer Footstar plans to sell its remaining athletic shoe stores to Foot Locker for $160 million in cash. Announced last week, Foot Locker will acquire 350 Footaction stores, increasing its store count by nearly 10 percent and making it 7.5 times larger than Finish Line, its nearest rival. Even though Foot Locker and Footaction are primarily mall-based chains, sometimes in the same complex, Foot Locker said the purchase would be accretive within the first year. Banc of America Securities LLC is advising Foot Locker on the deal. Analysts say the acquisition is a rare move for Foot Locker, which has resisted several takeover candidates and passed on other deals in past months. Three years back, Foot Locker sold off the last of its nonathletic businesses — a musical gifts retailer and the owner of Burger King franchises — to focus entirely on athletic gear. On the day of the announcement, Wall Street mid-afternoon trading showed Foot Locker shares had gained 5.7 percent on the news, while Finish Line’s lost 5.8 percent. The sale of Footaction leaves Footstar with its discount and licensed shoe retailer division, Meldisco. Meldisco operates under license some 2,500 shoe departments within Kmart stores and other discount retailers. Meldisco also distributes its own Thom McAn shoes through Wal-Mart Stores Inc. and Kmart.

Play It Again Sports parent announces increase in net income
Winmark Corp. (Nasdaq: WINA), parent to Play It Again Sports and a provider of financial services, announced April 13 its net income for the quarter ended March 27, 2004, of $1,360,300 (or $.21 per share diluted) compared to net income of $1,122,200 (or $.18 per share diluted) in the first quarter of 2003. The company attributes the increase in earnings partly to higher revenues from royalties. Winmark oversees 812 franchises and retail stores, including 445 Play It Again Sports. For more information about this company or its financial reports, as well as to view stock prices updated every 15 minutes, visit the SNEWS® Stock Market Updates. Click on: www.outsidebusinessjournal.com/cgi-bin/snews/stock_report.html.

Amer applies new financial reporting standards
FINLAND — In line with its previously stated intention, Precor-parent Amer Group has applied International Financial Reporting Standards (IFRS) to its financial reporting as of Jan. 1, 2004. The introduction of IFRS rules, compared with the previously used FAS (Finnish Accounting Standards) accounting policies, improved 2003’s results, primarily due to the removal of annual goodwill amortization charges. Net sales under the new IFRS standards were Euro 1,094.1 million, while they were Euro 1,104.4 million under the FAS system. EBIT is now Euro 117.7 million, compared to Euro 101.3 million. Net profit is now reported as Euro 78.1 million and had been reported as Euro 64.7 million. Net sales for the fitness equipment segment (Precor and its companies) did not change, remaining at 51.4 million. The entire document is available on the Amer Sports website by clicking here.

Amer Group’s registered share capital changes
FINLAND — As approved by Amer Group Plc’s Annual General Meeting on March 17, 2004, the registered share capital of Amer Group has been decreased by Euro 3,873,200 by canceling without payment those 968,300 of its own shares the company held. The change in the share capital was registered today. After the cancellation, the company’s paid up and registered share capital now amounts to Euro 94,305,280 and the number of shares in issue is 23,576,320. Restricted shareholders’ equity did not decrease due to the cancellation because the accounted counter-value of the shares was transferred from the Company’s share capital to the share premium fund. The cancellation did not have any impact on the breakdown of shareholdings and votes in the Company’s share capital because the cancelled shares were owned by the company.