This excerpt taken from the FL 10-Q filed Dec 10, 2008.
13. Subsequent Event
The Company closed its purchase of CCS from dELiA*s, Inc. on November 5, 2008 for a cash purchase price of $102 million, subject to customary post-closing adjustments related to inventory. CCS is the leading direct-to-consumer retailer in the United States that sells skateboard footwear, apparel and accessories through catalogs and the Internet. The Company intends to include the CCS business in the Direct-to-Customers segment.
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
Foot Locker, Inc., through its subsidiaries, operates in two reportable segments Athletic Stores and Direct-to-Customers. The Athletic Stores segment is one of the largest athletic footwear and apparel retailers in the world, whose formats include Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sports and Footaction. The Direct-to-Customers segment reflects Footlocker.com, Inc., which sells, through its affiliates, including Eastbay, Inc., to customers through catalogs and Internet websites. The Company also operated the Family Footwear segment, which included the retail format under the Footquarters brand name, through the second quarter of 2007. During the third quarter of 2007, the Company converted the Footquarters stores, which were the only stores reported under the Family Footwear segment, to Foot Locker and Champs Sports outlet stores.
At November 1, 2008, the Company operated 3,714 stores as compared with 3,785 at February 2, 2008. During the thirty-nine weeks ended November 1, 2008, the Company opened 58 stores, and remodeled or relocated 194 stores and closed 129 stores.
In March of 2006, the Company entered into a ten-year area development agreement with the Alshaya Trading Co. W.L.L., in which the Company agreed to enter into separate license agreements for the operation of Foot Locker stores located within the Middle East. Additionally in March 2007, the Company entered into a ten-year agreement with another third party for the exclusive right to open and operate Foot Locker stores in the Republic of South Korea. A total of 16 franchised stores were operational at November 1, 2008. Revenue from the franchised stores was not significant for the thirteen and thirty-nine weeks ended November 1, 2008 or November 3, 2007. These stores are not included in the Companys operating store count above.
SALES AND OPERATING RESULTS
All references to comparable-store sales for a given period relate to sales of stores that are open at the period-end and that have been open for more than one year. Accordingly, stores opened and closed during the period are not included. Sales from the Direct-to-Customers segment are included in the calculation of comparable-store sales for all periods presented. Division profit (loss) reflects income (loss) before income taxes, corporate expense, non-operating income and net interest expense. The following table summarizes sales and operating results by segment:
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