Athlete's Foot strides on

RETAIL Cube – owners of the Athlete's Foot franchise – yesterday said it was business as usual in Australia after the corporate arm of The Athlete's Foot Corporate Stores in the US filed for Chapter 11 bankruptcy protection last week.

The Australian
December 14, 2004

Athlete's Foot strides on
Katherine Jimenez

RETAIL Cube – owners of the Athlete's Foot franchise – yesterday said it was business as usual in Australia after the corporate arm of The Athlete's Foot Corporate Stores in the US filed for Chapter 11 bankruptcy protection last week.

In a statement yesterday, Retail Cube chief executive Robert Estcourt said: "We are surprised by the events from the US but it has no bearing on the Athlete's Foot here in Australia."

Retail Cube, which is a new listed retail brand company, bought the Athlete's Foot licence earlier this year. It holds the licence agreement until 2015.

In Australia, the Athlete's Foot operation is made up of 96 franchise stores and 14 corporate-owned stores. It has 763 staff.

Mr Estcourt said the Australian company, which operates separately from its American counterpart, was not affected and "continued to trade handsomely in the lead-up to Christmas".

He said the Australian business was "robust".

Last Thursday in the US, The Athlete's Foot Stores, owner of 124 The Athletes Foot Corporate Stores, filed for Chapter 11 because its company-owned stores were not "profitable, resulting in a lack of liquidity".

The action did not include the worldwide 593 independent franchise stores operating under franchise agreements with Athlete's Foot Brands.

Despite Retail Cube's assurance that the Australian business would not be affected, management warned last week that its paint and knives businesses – King of Knives and Amazing Paints – were not going to meet their respective prospectus sales and profit forecasts. As such, it expected earnings before interest and tax (EBIT) for the 2005 financial year might be up to 20 per cent below prospectus forecasts.

Retail Cube foreshadowed an EBIT of $6.084 million. Athlete's Foot is expected to produce "strong profit growth in the 2005 financial year".

Shares in Retail Cube fell 3.5c to 37.5c – well short of its 50c issue price in July.


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