Footstar Inc. (OTC:FTAR) is selling its footwear license to Sears Holdings (NASDAQ:SHLD) for $13 million in preparation for winding down its business at the end of the year. Footstar agreed to sell substantially all of its intellectual property to Sears, including the intellectual property related to Sears’ Kmart business.
operates roughly 1,300 licensed footwear departments at Kmart under a
contract set to expire at the end of 2008. They also operate licensed
footwear departments in 859 Rite Aid Corporation stores located on the
West Coast. Brands under Footstar’s operations include Thom McAn,
Cobbie Cuddlers and Texas Steer — which are company owned — and Route
66 and Basic Editions. Kmart-licensed footwear departments account for
substantially all of its $630 million in sales and $53 million
operating profit. Kmart has begun to hire several employees from
Footstar and has promised employment to almost all current management.
for $13 million Lampert has saved Sears essentially $53 million
annually (the profits Footstar received from Kmart). Not a bad
Disclosure: Long SHLD.