Sears' Nifty Purchase: Footstar Footwear

Footstar Inc. (FTAR) is selling its footwearlicense to Sears Holdings (SHLD) for $13 million in preparation forwinding down its business at the end of the year. Footstar agreed tosell substantially all of its intellectual property to Sears, includingthe intellectual property related to Sears’ Kmart business.<!--more-->

Footstaroperates roughly 1,300 licensed footwear departments at Kmart under acontract set to expire at the end of 2008. They also operate licensedfootwear departments in 859 Rite Aid Corporation stores located on theWest Coast. Brands under Footstar’s operations include Thom McAn,Cobbie Cuddlers and Texas Steer — which are company owned — and Route66 and Basic Editions. Kmart-licensed footwear departments account forsubstantially all of its $630 million in sales and $53 millionoperating profit. Kmart has begun to hire several employees fromFootstar an...