NEW YORK -- From Main Street to Wall Street, the past year was a financial roller coaster ride for many footwear companies.
The valleys of the year were mergers that fell through because of sagging stock prices. Poison pill plans became common to block hostile takeovers. Firms whose earnings rebounded, such as Hyde Park, Mass.,- based Maxwell Shoe Inc.; Rockford , Mich.,-based Wolverine World Wide Inc., and St. Louis, Mo.,-based Brown Group Inc. , said stock prices didn't reflect that.
Problems surfaced early in the year when stocks Wall Street watches as industry indicators warned they would miss earnings. Beaverton, Ore.,- based Nike Inc. and White Plains, N.Y.,-based Nine West Group stocks fell, and New York-based Venator Group stock sank like a lead balloon. Indianapolis, Ind.,-based The Finish Line comps and stock prices dove, dragging down other retailers. Small companies sometimes stood out. Chatsworth, Calif,-based K-Swiss Inc. reached all-time highs.
By the end of the year, though, there was a new trend: Companies began aggressively buying back their own shares. Greenway Partners upped its interest in Venator. Many analysts shifted Nike to a 'buy' rating. But 1998 ended with persistent questions raised earlier in the year .
'I guess the first question everyone should ask is, `Is being global a good thing?'' asked Wolverine World Wide Chairman Geoffrey Bloom at FN's Global Summit this past summer. 'Those with global reach will have the opportunity to serve a wider audience.'
The biggest stock stories of the year were mergers scuttled by stock shortfalls. Venator's CEO rang the bell on the trading floor after changing its name from Woolworth Corp. The firm's plan to acquire Ft. Lauderdale, Fla.,-based The Sports Authority would create an $8.4 billion athletic giant. But Wall Street rang its own death knell for that deal when Venator stock failed to reach its benchmark . Denver, Col.,-based Gart Sports made an unsuccessful bid for The Sports Authority.
Manhattan Beach, Calif.,-based Skechers U.S.A. filed for a stock offering expected to generate $115.1 million. The deal would have added the 'SKX' symbol to the New York Stock Exchange. But Skechers said it didn't need the cash and could wait .
Not all acquisitions, however, were torpedoed by stock troubles. Dallas, Texas-based Dillard's Inc. bought the Mercantile Stores in a $2.9 billion stock deal. 'This thing happened so fast,' Mercantile Chairman David Nichols said in May. Birmingham, Ala.,-based Proffitt's Inc. took over Saks Fifth Avenue and changed its name to Saks Inc. Proffitt's pointed to synergies, but analysts saw risks of high-end fashion vs. Proffitt's successful lower-priced formula.
If there were no public stock offerings in this industry, bankruptcies also were at a low. The gavel came down on New York-based Cable & Co. Worldwide as Los Angeles, Calif.,-based Beverly Hills Shoes Inc. bought its brands. Elder Beerman Corp. acquired Stone & Thomas. Birmingham, Ala.,-based Just For Feet bought Edison, N.J.,-based Sneaker Stadium. New York-based Barney's Inc.'s plan to exit bankruptcy got the green light.
Stock prices scuttled some deals, but didn't stop private firm Birkenstock Footprint Sandals, Novato, Calif., from advancing an employee ownership plan. An employee-led buyout took place at Brooks Sports.
