Foot Locker is again caressing a long-term goal of building up a network of 1,000 stores in Europe, where its margins remain high and are improving. It confirms a plan to open 30 new stores in Europe in 2008, compared with only 12 in 2007. The company also confirms the phaseout of Footquarters, a disappointing experiment with the sale of brown shoes, but says it will have more of them on offer in its regular stores.

The company’s profitability improved by 20 percent outside the USA during the 2nd quarter ended Aug. 4, led by strong gains at Foot Locker Europe, but problems in the U.S. market led it to post a loss of $18 million for the period, compared with a profit of $14 million in the year-ago quarter, on 2 percent lower total sales of $1,283 million. The loss was somewhat lower than what some analysts had expected, allowing the share price to recover some lost ground.

On a same-store basis, sales were off by 7.3 percent overall. Sales outside the USA were down in the mid-single digits, with Europe showing the worst performance, whereas Canada was flat and Australia was positive. The total pairage was up by 3 percent, but average selling prices were down by 10 percent, due to a large extent to aggressive clearance sales.

The low-profile fashion athletic category has clearly peaked in Europe, according to Foot Locker, but technical running is making a big comeback in the region.

Foot Locker confirms that it will close down numerous stores in the USA, where it its network of Foot Locker branded doors will likely be reduced to 1,100 units. They will carry higher-priced footwear and more apparel.