Shoe chain Footstar Inc on Thursday posted a 1.5 per cent slip in third quarter same-store sales as it was hurt by lower sales at its Meldisco unit due to fewer Kmart stores from last year.

The New York-based operator of more than 500 stores said total sales for the quarter ended September 37 fell 13.7 per cent to $506.6 million from $586.8m in the third quarter of 2002.

Total sales for the company's athletic segment increased 0.7 per cent to $267m from $265.2m and total sales for the Meldisco division plunged 25.5 per cent to $239.6m from $321.6m.

"Management is working to improve performance at Just for Feet through major initiatives including increasing the availability of exclusive and allocated footwear product, and identifying opportunities to convert certain Just For Feet stores into Footaction stores, to split Just For Feet stores with other Company retail concepts such as Footaction or Shoe Zone, and to sublet or exit underperforming locations," it said.

"In the fourth quarter Just For Feet expects to benefit from the introduction of marquee Nike product."