FINANCE

Aether to Buy The Athlete’s Foot

BY CSA STAFF

New York City, Aether Holdings announced Monday that it has entered into a definitive agreement to acquire The Athlete’s Foot brand along with the global retail franchise operation. Aether also said it intends to start doing business as NexCen Brands Inc.

Robert Corliss, president and CEO of The Athlete’s Foot, will continue with Aether after the closing as president and CEO of Aether’s retail franchise division, NexCen Franchise Brands Inc.

Aether has also agreed to enter into employment arrangements with certain key executives of The Athlete’s Foot, including Corliss. The company did not disclose names of other executives.

“This franchise system will provide us not only with a historical and growing revenue stream, but also a flexible distribution channel for additional consumer brands that we plan to acquire in the future,” said Robert D’Loren, Aether’s president and CEO. “This is an exciting first step for Aether toward building a large and diverse portfolio of consumer brands and franchise-related assets.”

Aether will pay $51.5 million at closing through a combination of cash and the issuance of Aether common stock. The transaction is expected to close before the end of 2006.

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FINANCE

Gap 2Q Profit Plunges

BY CSA STAFF

New York City, The prospects for a quick turnaround at Gap Inc. diminished Thursday after the retailer reported more than a 50% drop in second-quarter profit and cut its earnings forecast for the year.

Gap Inc. reported its net income for the quarter ended July 29 dropped to $128 million from $272 million for the same period last year. Sales were flat at $3.72 billion, while comp-store sales fell 5%, compared with a prior-year decrease of 3%. Gap cited sluggish sales and “aggressive” discounting.

“The second quarter was more challenging than we expected,” Paul Pressler, CEO and president, Gap Inc., said in an address to investors during a conference call Thursday. “While we are encouraged by improved performance at Banana Republic, business was tough at Gap and Old Navy as we cleared through summer product. But across all businesses, I believe we are making progress.” Comp-store sales at Gap stores fell 6% in the second quarter, while comp-stores sales at Old Navy slumped 5% and comp-store sales at Banana Republic slipped 1%.

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REAL ESTATE

IKEA Plans First Ohio Store

BY CSA STAFF

West Chester, Ohio, IKEA announced that it will build its first Ohio store in the Cincinnati suburb of West Chester. A 339,000-sq.-ft. store is planned on 56 acres about 25 miles north of Cincinnati. IKEA said it would be selling about six acres for retail and restaurant uses. The store will include three model homes, a children’s play area and a 300-seat restaurant, the company said. The store is expected to open in fall 2007.

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