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1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ----------------------- Date of Report (Date of earliest event reported): October 22, 1998 - -------------------------------------------------------------------------------- VENATOR GROUP, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) New York No. 1-10299 13-3513936 -------- ----------- ---------- (State or other jurisdic- (Commission (IRS Employer tion of incorporation) File Number) Identification No.) 233 Broadway, New York, New York 10279-0003 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code:(212) 553-2000 -------------- 2 This form 8-K/A amends the Registrant's current Report on Form 8-K filed on November 9, 1998 with respect to the completion of the disposition of the Registrant's general merchandise operations in Germany and Austria, to update the information previously provided in Item 2(b) and to provide the pro forma financial information required by item 7 of Form 8-K. Item 2. Acquisition or Disposition of Assets. - ------- ------------------------------------- (b) The Registrant received gross cash consideration from the Purchasers of DM 950 million. The amount of the consideration received by the Registrant was negotiated by the parties. The Registrant determined not to proceed with the investment of DM 15 million in the Purchasers that was referred to in the Registrant's Form 8-K filed on November 9, 1998. Item 7. Financial Statements and Exhibits. ---------------------------------- (b) Pro Forma Financial Information -------------------------------- Set forth hereunder is the unaudited pro forma financial information required to be furnished by the Registrant with respect to the transaction referred to in Item 2 above: Pro Forma Condensed Consolidated Balance Sheet as of August 1, 1998 ..................................... Schedule I Pro Forma Condensed Consolidated Statements of Operations: Year Ended January 31,1998 .............................. Schedule II Twenty-six Weeks Ended August 1, 1998 ................... Schedule III The following Unaudited Pro Forma Condensed Consolidated Balance Sheet reflects the historical financial position of the Registrant as of August 1, 1998, and after giving effect to the disposition of the general merchandise operations in Germany and Austria referred to in Item 2 above as if the sale transaction had been consummated on August 1, 1998. The Balance Sheet also reflects the discontinuance of the Specialty Footwear segment as previously reported. The following Unaudited Pro Forma Condensed Consolidated Statements of Operations reflect the historical Statements of Operations of the Registrant for the fiscal year ended January 31, 1998 and the twenty-six weeks ended August 1, 1998 and assume the sale transaction occurred on January 26, 1997. The Statements of Operations do not include the $270 million before-tax or $193 million after-tax estimated loss on disposal of the Specialty Footwear and the remaining International General Merchandise discontinued operations, which will be recorded by the Registrant in the third quarter of 1998. The Unaudited Pro Forma Condensed Consolidated Financial Statements have been prepared by the Registrant based upon reasonable assumptions. The Unaudited Pro Forma Condensed Consolidated Financial Statements presented herein are shown for illustrative purposes only and are not necessarily indicative of the future financial position or future results of operations of the Registrant, or of the financial position or results of operations that would have actually occurred had the transaction been in effect as of the date or for the periods presented. In addition, it should be noted that the Registrant's financial statements will reflect the sale of the Registrant's general merchandise operations in Germany and Austria on October 22, 1998, the Closing date. The Unaudited Pro Forma Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes Thereto contained in the Registrant's Form 10-K for the fiscal year ended January 31, 1998 and Form 10-Q for the period ended August 1, 1998. -2- 3 Schedule I PRO FORMA FINANCIAL INFORMATION ------------------------------- VENATOR GROUP, INC. ------------------- PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF AUGUST 1, 1998 ------------------------------------------------------------------ (UNAUDITED) (in millions) Pro Forma Adjustments ----------------------------- International General Specialty Historical Merchandise Footwear Other Pro Forma ---------- ----------- -------- ----- --------- (a) (b) ASSETS - ------ Current Assets Cash and cash equivalents ......... $ 77 $ 80 $ (4) $ 57 (c) $ 58 Merchandise inventories 1,406 272 139 995 Other assets 238 23 19 196 Net assets of discontinued operations .......... -- -- -- 198 (d) 198 _____ ____ ____ ____ _____ 1,721 375 154 255 1,447 Property and equipment, net 1,214 386 40 788 Deferred charges and other assets ............... 716 69 10 (19)(f) 618 _____ ____ ____ ____ _____ $ 3,651 $ 830 $ 204 $ 236 $ 2,853 ===== ==== ==== ==== ===== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Current liabilities Short-term debt ....... $ 451 $ -- $ -- $(451)(c)(e) $ -- Accounts payable and accrued liabilities . 797 133 35 52 (g) 681 Reserve for discontinued operations .......... -- -- -- 229 (h) 229 _____ ___ ____ ____ _____ 1,248 133 35 (170) 910 Long-term debt and obligations under capital leases ... 536 26 1 509 Deferred taxes and other liabilities .......... 604 209 9 386 Total shareholders' equity 1,263 462 159 406 1,048 _____ ____ ____ ____ _____ $ 3,651 $ 830 $ 204 $ 236 $ 2,853 ===== ==== ==== ==== ===== (a) To eliminate the assets and liabilities included in the balance sheet of the Registrant's International General Merchandise business as of August 1, 1998. (b) To eliminate the assets and liabilities included in the balance sheet of the Registrant's Specialty Footwear business as of August 1, 1998. (c) To reflect the $508 million net proceeds from the sale of the Registrant's general merchandise operations in Germany and Austria. Gross proceeds of DM 950 million were translated using an exchange rate of .59, the rate in effect at the Closing date. (d) Includes the net assets of Specialty Footwear discontinued operations at August 1, 1998 and the other International General Merchandise net assets to be disposed of. (e) To reflect the reduction of debt from the proceeds of the general merchandise operations in Germany and Austria. (f) To reflect deferred tax assets ($42 million) related to the Specialty Footwear one time charge offset by the realization of other deferred tax assets ($61 million). (g) To reflect transaction costs ($13 million) and income tax liabilities ($135 million), related to the sale of the Registrant's general merchandise operations in Germany and Austria, offset by the tax benefit related to the Specialty Footwear one-time charge ($35 million) and the realization as a result of these transactions of other deferred tax assets ($61 million). (h) To reflect the impact of the one-time pre-tax charge of $198 million for Specialty Footwear and $31 million for International General Merchandise primarily related to leasehold and real estate, inventory liquidation and severance. The related tax benefit of $77 million is included as deferred charges and other assets ($42 million) and current liabilities ($35 million). -3- 4 Schedule II PRO FORMA FINANCIAL INFORMATION ------------------------------- VENATOR GROUP, INC. ------------------- PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED JANUARY 31, 1998 ----------------------------------- (UNAUDITED) (in millions) Pro Forma Adjustments ---------------------------- International General Specialty Historical Merchandise Footwear Other Pro Forma ---------- ----------- -------- ----- --------- (a) (b) Sales $ 6,624 $ 1,481 $ 531 $ $ 4,612 _____ ______ ____ ____ _____ Costs and expenses Cost of sales ........ 4,568 1,042 399 3,127 Selling, general and administrative expenses 1,535 394 133 1,008 Depreciation and amortization .... 168 36 10 122 Interest expense, net 44 3 6 (30) (c) 5 Other income ......... (29) (13) (3) (13) _____ _____ ____ ____ _____ 6,286 1,462 545 (30) 4,249 _____ _____ ____ ____ _____ Income (loss) from continuing operations before income taxes ............... 338 19 (14) 30 (c) 363 Income tax expense (benefit) 125 11 (6) 11 131 Income (loss) from continuing _____ _____ ____ ____ _____ operations ........ $ 213 $ 8 $ (8) $ 19 $ 232 ==== ===== ==== ==== ===== Basic earnings per share: Income from continuing operations ......... $ 1.58 $ 1.72 ===== ===== Weighted-average common shares outstanding .......... 134.6 134.6 Diluted earnings per share: Income from continuing operations ......... $ 1.57 $ 1.71 ===== ===== Weighted-average common shares assuming dilution .... 135.8 135.8 (a) To eliminate the operations of the Registrant's International General Merchandise business for the year ended January 31, 1998. (b) To eliminate the operations of the Registrant's Specialty Footwear business for the year ended January 31, 1998. (c) Represents estimated interest savings at 6 percent from the $508 million net proceeds from the sale of the general merchandise operations in Germany and Austria, tax effected at 37 percent. -4- 5 Schedule III PRO FORMA FINANCIAL INFORMATION ------------------------------- VENATOR GROUP, INC. ------------------- PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE TWENTY-SIX WEEKS ENDED AUGUST 1, 1998 --------------------------------------------- (UNAUDITED) (in millions) Pro Forma Adjustments ---------------------------- International General Specialty Historical Merchandise Footwear Other Pro Forma ---------- ----------- -------- ----- --------- (a) (b) Sales $ 2,931 $ 608 $ 222 $ 2,101 ----- ---- ---- ----- Cost and expenses Cost of sales ..... 2,098 433 181 1,484 Selling, general and administrative expenses 771 175 71 525 Depreciation and amortization ....... 91 16 5 70 Interest expense, net 21 -- 4 (15) (c) 2 Other income ...... (22) (3) -- (19) _____ ____ ____ ___ _____ 2,959 621 261 (15) 2,062 _____ ____ ____ ___ _____ Income (loss) from continuing operations before income taxes .. (28) (13) (39) 15 39 Income tax expense (benefit) (10) (5) (15) 6 16 Income (loss) from continuing _____ ____ ____ ___ _____ operations ........... $ (18) $ (8) $ (24) 9 $ 23 ===== ==== ==== === ===== Basic earnings per share: Income (loss) from continuing operations $ (0.13) $ 0.17 ===== ===== Weighted-average common share outstanding .... 135.3 135.3 Diluted earnings per share: Income (loss) from continuing operations $ (0.13) $ 0.17 ====== ===== Weighted-average common shares assuming dilution 135.3 0.9 (d) 136.2 (a) To eliminate the operations of the Registrant's International General Merchandise business for the period ended August 1, 1998. (b) To eliminate the operations of the Registrant's Specialty Footwear business for the period ended August 1, 1998. (c) Represents estimated interest savings at 6 percent from the $508 million net proceeds from the sale of the general merchandise operations in Germany and Austria, tax effected at 37 percent. (d) To reflect dilution from the Registrant's stock options. -5- 6 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned being hereunto duly authorized. VENATOR GROUP, INC. ------------------- (Registrant) Date: November 23, 1998 BY: /s/ Reid Johnson -------------------- Reid Johnson Senior Vice President and Chief Financial Officer -6-