CINCINNATI -- In another step to help bolster its apparel business, U.S. Shoe Corp. said Friday it signed an agreement in principle to sell most of the assets in Caren Charles and Ups 'N Downs women's apparel divisions to A.I.J.J. Enterprises, the women's apparel retailer.
Terms were not disclosed.
In addition to the sale of the stores, U.S. Shoe said it would close 30 Caren Charles and Ups 'N Downs stores as leases expire this year.
The transaction, which does not include inventory, includes 124 Caren Charles and 61 Ups 'N Downs stores and also the ownership of both trade names.
U.S. Shoe said the sale is expected to reduce its second-quarter earnings by 14 cents a share.
With the sale and the store closures, U.S. Shoe will pull out of these two retail operations.
The company has attributed a lot of its financial problems to losses at the two divisions.
'This decision, while not an easy one, is essential for both the short- and long-term improvement of our apparel operations,' said Michael Searles, president of U.S. Shoe's women's apparel retailing group. 'We have expended considerable effort to improve results in these businesses. As we have indicated, we will exit businesses that we cannot make a successful part of our long-term strategy.'
Last month, Noel Davidson, the head of the company's specialty retail apaprel division, stepped down from his position after 30 years with U. S. Shoe.
Davidson's departure was expected by industry observers who said it was part of the company's major management revamping.
U.S. Shoe said it expect to incur operating losses until the stores are transferred or closed.
The stores represented about 14 percent of U.S. Shoe's 1,517 retail apparel units as of May.
Combined annual sales of the two divisions was $176 million, or approximately 7 percent of the company's total revenues.
The stores will be transferred to the purchaser over the second half of 1993.
'This action also frees up our management team to focus on other businesses that have greater potentialto make a contribution to our specialty apparel operations,' Searles said. 'In particular, the sale of these two divisions will allow us to focus directly on our newer Capezio and Pappagallo concepts.'
U.S. Shoe, which also owns LensCrafters and footwear stores, operates about 2,500 retail outlets and leased units within department stores with names like Casual Corner, Petite Sophisticate, August Max Woman, and Easy Spirit. The company also manufactures footwear with brands such as Easy Spirit, Selby, Amalfi and Bandolino.