Tuesday, March 20, 2007

Foot Locker Trying to Snatch Genesco

Foot Locker has been in an expansive mood this year. First it tried to buy Famous Footwear, and when that didn't work out, it announced that it was going to open up its own chain of family footwear stores. Take that, Famous! And today I read in Footwear News that ole Foot Locker is trying to purchase Genesco, which is best known for its chain of Journey stores. Here's a snippet from the article:

New York-based Foot Locker is said to be preparing a tender offer for shares of Nashville-based Genesco in the $44 to $46 per-share range. The bid is expected to be announced soon, perhaps as early as this week, the sources said.

And so far, it looks like Genesco aint interested:

Financial sources also said Foot Locker has made some preliminary, exploratory contact with Genesco. They also said they expect Genesco to rebuff the tender offer, setting the stage for an old-fashioned heated fight for control of the footwear and accessories firm. Should Genesco turn the bid down, sources familiar with Foot Locker's plans said the footwear and apparel retailer might be prepared to go as high as $48 per share.

According to the article, supposedly Foot Locker wants Genesco for its Lids business, but I think it's Journeys that's bringing on the drool. Either way, being so heavily segmented in the malls of America strikes me as a rsiky move, but then again, if Foot Locker buys Journeys, it would have so much buying power that it could potentially bring competitors like Finish Line and PacSun to their knees.

Me personally, I'd hate to see this deal go down. Retail if anything needs an injection of upstart independents and Foot Locker is already too big and slow-moving. And it seems like a bad match from a company culture perspective, too. It's like Tom Cruise and Katie Holmes as a couple. They were both successful in their own right, but together they make ZERO sense.

Anyway people, if you stop by the snack counter the next time you come in, please bring me the biggest bucket of popcorn they got. And bring some napkins cuz I have a feeling this one could get greasy.

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