Athletic retailer Foot Locker has confirmed receiving inquiries from private equity firms as speculation mounts it is up for sale.

The company confirmed that it had retained Lehman Brothers as an advisor to work with the company to evaluate strategic alternatives, including inquiries received from private equity firms.

Foot Locker said it expects same-store sales to decrease 7 to 8% for the second quarter after making the decision to liquidate slower-selling merchandise in US stores.

The retailer has also announced taking several steps during the second quarter that are designed to strengthen its business operations. Among those actions were the early closure of additional US stores, more aggressive store opening plans for Europe and senior division management changes.

The company has identified a number of unproductive domestic stores that it is pursuing to close over the next several months and said that a total of up to 250 stores will be closed in 2007, to enhance profitability. At the same time, Foot Locker plans to open up to 30 new stores to be managed by the Foot Locker Europe management team during 2008.

The company currently expects to report a loss in a range of US$0.17-to-$0.20 per share for the second quarter period, reflecting increased markdowns in the company's US stores of approximately $55m at cost, or approximately $0.22 per share, versus the same period last year to liquidate slow-selling merchandise. The company's estimate for the second quarter that was provided at the beginning of the period was net income of $0.15-to-$0.20 per share. 

"During the second quarter, we made the strategic decision to liquidate slower-selling merchandise in our US stores more aggressively than we had planned at the beginning of the quarter, with an objective of improving our inventory position before the start of the fall season," said Matthew D Serra, Foot Locker's chairman and CEO.  "The financial impact of implementing this important strategy was the primary reason for the projected net loss for the second quarter of 2007. We expect our international units will produce a double-digit division profit increase versus last year's comparable period."

The company's financial position continued to strengthen during the second quarter, it said, and its cash position, net of debt, is expected to increase by approximately $50m from the same time last year.  

Keith Daly, currently President and CEO of Foot Locker Europe since 2005, was promoted to president and CEO of Foot Locker US. Dick Johnson, who has been president and CEO of since 2003, will replace him.  An executive search is currently being conducted to identify a suitable candidate to replace Johnson, the company added.