In Deal to Sell Footwear Business to Nine West, Rejects Italian Offer
CINCINNATI (AP) _ U.S. Shoe has decided to go barefoot.
United States Shoe Corp. on Thursday announced the sale of its footwear division to competitor Nine West Group Inc., for $600 million, rejecting a $1.1 billion acquisition offer for the entire company from an Italian shoemaker.
The sale, if completed, would close a 71-year-old chapter in the life of U.S. Shoe, originally formed as a combination of five small Ohio shoe manufacturers that later expanded into a diversified retailer selling women’s clothes and eyeglasses.
U.S. Shoe’s board said Luxottica Group S.p.A.’s unsolicited $24-per-share offer was inadequate. The board recommended shareholders not sell their shares to the Milan, Italy-based maker of eyeglass frames and sunglasses. The board scheduled a meeting April 21 for shareholders to vote.
Luxottica spokeswoman Felicia Vonella in New York said the company had no immediate comment. But on Wall Street, U.S. Shoe stock jumped on the news, an indication that investors foresee a higher bid emerging.
At the close of trading on the New York Stock Exchange, U.S. Shoe shares fetched $25.75, up $1.
The Cincinnati-based U.S. Shoe said Nine West, of Stamford, Conn., will pay for the footwear business with $560 million in cash and the remainder in securities. The company hopes to complete the Nine West deal, which is subject to regulatory approval, within 90 days.
Asked if U.S. Shoe will rename itself after it no longer is a shoe company, spokesman Robert Burton said: ``That’s so far ahead of the curve. I don’t think we’ve given it a lot of thought.″
On Feb. 17, U.S. Shoe had said it had ended negotiations with Nine West after seven months of talks.
Luxottica made the offer to U.S. Shoe’s shareholders on March 3. The Italian rival said it wanted U.S. Shoe’s LensCrafters optical products division and would sell the footwear and women’s apparel units.
New York-based Greenway Partners, which owns 2.2 million shares of U.S. Shoe, has been urging U.S. Shoe since last year to break up its businesses for the benefit of stockholders.
``The Nine West deal is a good first step. Now we think U.S. Shoe should deal with all interested parties to find a transaction which maximizes for shareholders the value of LensCrafters and the women’s apparel division,″ said Gary Duberstein, Greenway’s managing director.
The deal gives Nine West title to U.S. Shoe brands including Easy Spirit, Bandolino, Amalfi, Evan Picone, Selby and Texas Boot. Nine West’s brands include Nine West, Enzo Angiolini, Calico, 9 & Co. and Westies.
U.S. Shoe said its footwear division had operating income of $36 million on revenues of $444 million in fiscal 1994, the unit’s best results in the past six years.
The company’s women’s apparel business operates more than 1,300 stores, mostly in American shopping malls. Its LensCrafters chain, the world’s largest optical business, operates 543 stores, including 60 in Canada.