Brown Shoe Company, Inc. (NYSE: BWS) today provided an update on its
expense and capital containment initiatives that were announced January
21, 2009. These initiatives, which include changes in compensation
structure, rationalization of operating expenses, and workforce
reduction, are now expected to yield annual savings in the range of $28
million to $31 million. Costs related to its expense initiatives are
currently anticipated in the range of $27 million to $30 million ($5
million to $6 million will be non-cash), the majority of which will be
incurred in the Company's fourth quarter of fiscal 2008. The Company has
also reduced its planned capital expenditures for the 2008 to 2011
period by an additional $35 million, bringing total planned capital
expenditure reductions to $107 million for this period.
The workforce reduction program is expected to affect 12 to 14 percent
of its domestic workforce in business areas across the enterprise,
excluding stores and distribution centers. Associate separations are
beginning in February, with final dates of employment determined on an
individual basis and driven by business need. Additionally, the Company
has made commensurate reductions in workforce and payroll in its Far
East sourcing operations, stores, and distribution centers.
"These are essential actions that we are taking to proactively address
the uncertainty that remains in the marketplace and we remain focused on
identifying additional opportunities to reduce expenses without
impacting investments in key strategic growth opportunities. Reducing
our workforce is a necessary measure to appropriately realign our cost
structure to sales expectations. It is the right thing to do for our
business and we are committed to implementing it in the right way for
our business and our people, who have made tremendous contributions to
our company's culture and successes," Brown Shoe Chairman and CEO Ron
Fromm said.
The Company also announced that preliminary consolidated net sales for
the thirteen-week period ended January 31 were $521 million. Preliminary
net sales for the period for its Famous Footwear division were $312
million and same- store sales declined 3.6 percent. Preliminary net
sales at its Wholesale division in the quarter declined by 25 percent
versus the same period last year, slightly below expectations primarily
due to a shift of shipments into the first quarter, as a result of the
extreme winter weather in the last week of January.
Fromm continued, "Brown Shoe continues to work hard in this difficult
economic environment to deliver unique consumer offerings and generate
sales in our retail and wholesale brands, while effectively managing our
liquidity, capital, and expenses. We are focused on maintaining our
financial health while appropriately investing in strategic and market
share opportunities, including scheduled brand launches in 2009. While
we are in the process of closing our books for the quarter and the year,
we are comfortable with our previous communication that we expect our
adjusted earnings per diluted share to fall within the low-end of our
guidance range."
The Company also announced that it will hold a conference call to
discuss its fourth quarter and full-year 2008 financial results on
Thursday, March 5, 2009 at 8:00 a.m. Central time/9:00 a.m. Eastern
time. The question-and-answer session of the call will be limited to
institutional analysts and investors, but retail brokers, individual
investors, and other interested parties are invited to attend via a live
webcast at http://www.brownshoe.com/investor
or http://www.earnings.com
website (type in the BWS ticker symbol to locate the broadcast). The
Company plans to issue its quarterly results press release before the
market opens that day.
Safe Harbor Statement Under the Private Securities Litigation Reform Act
of 1995:
This press release contains certain forward-looking statements and
expectations regarding the Company's future performance and the future
performance of its brands. Such statements are subject to various risks
and uncertainties that could cause actual results to differ materially.
These include (i) the preliminary nature of estimates of the costs and
benefits of the Company's expense reduction initiatives, which are
subject to change as the Company makes decisions and refines these
estimates over time; (ii) potential disruption to the Company's business
and operations as it implements its workforce reduction initiatives; and
(iii) the timing and uncertainty of activities and costs related to
expense reduction initiatives, software implementation, and business
transformation. The Company's reports to the Securities and Exchange
Commission contain detailed information relating to such factors,
including, without limitation, the information under the caption "Risk
Factors" in Item 1A of the Company's Annual Report on Form 10-K for the
year ended February 2, 2008, which information is incorporated by
reference herein and updated by the Company's Quarterly Reports on Form
10-Q. The Company does not undertake any obligation or plan to update
these forward- looking statements, even though its situation may change.
About Brown Shoe Company, Inc.
Brown Shoe is a $2.3 billion footwear company with global operations.
Brown Shoe's Retail division operates Famous Footwear, the over
1,100-store chain that sells brand name shoes for the family, over 300
specialty retail stores in the U.S., Canada, and China under the
Naturalizer, Brown Shoe Closet, FX LaSalle, Franco Sarto and Via Spiga
names, and Shoes.com, the Company's e-commerce subsidiary. Brown Shoe,
through its Wholesale divisions, owns and markets leading footwear
brands including Naturalizer, LifeStride, Via Spiga, Sam Edelman,
Nickels Soft, Connie and Buster Brown; it also markets licensed brands
including Franco Sarto, Dr. Scholl's, Etienne Aigner, Carlos by Carlos
Santana, Fergie branded footwear, and Vera Wang Lavender Label
Collection as well as Barbie, Fisher-Price and Nickelodeon character
footwear for children. Brown Shoe press releases are available on the
Company's website at http://www.brownshoe.com.
/Web site: http://www.brownshoe.com
