Foot Locker, Inc. Delivers Acquisition Proposal to Genesco Inc.

- Proposes To Pay $46 Per Share In Cash

    NEW YORK, April 20 /PRNewswire-FirstCall/ -- Foot Locker, Inc. (
 FL), the New York-based specialty athletic retailer, today announced that
 it had made an acquisition proposal to purchase all of the outstanding
 shares of Genesco Inc. ( GCO) for $46 per share in cash, subject to
 certain terms and conditions. The proposal came in a letter that Matthew D.
 Serra, Foot Locker, Inc.'s Chairman and CEO, sent on April 4, 2007 to Hal
 N. Pennington, Chairman, President and Chief Executive Officer of Genesco
 Inc.
     On April 19, 2007, Mr. Serra sent a follow-up letter to Mr. Pennington
 to reiterate Foot Locker, Inc.'s interest in acquiring Genesco, Inc. and
 his belief that the proposal represents significant value to Genesco
 shareholders. The proposed purchase price of $46 per share in cash
 represents a total consideration of approximately $1.2 billion for all of
 the equity of Genesco. This proposal provides to Genesco Inc.'s
 shareholders a 26 percent premium to the average share price during the one
 year period preceding the April 4, 2007 letter.
     The full text of both letters is attached.
     Foot Locker, Inc. is a specialty athletic retailer that operates
 approximately 4,000 stores in 20 countries in North America, Europe and
 Australia. Through its Foot Locker, Footaction, Lady Foot Locker, Kids Foot
 Locker, Champs Sports and Footquarters retail stores, as well as its
 direct- to-customer channel Footlocker.com/Eastbay, the Company is the
 leading provider of athletic footwear and apparel.
     Disclosure Regarding Forward-Looking Statements
     This press release contains forward-looking statements, which reflect
 management's current views of future events and financial performance.
 These forward-looking statements are based on many assumptions and factors
 detailed in the Company's filings with the Securities and Exchange
 Commission, including the effects of currency fluctuations, customer
 demand, fashion trends, competitive market forces, uncertainties related to
 the effect of competitive products and pricing, customer acceptance of the
 Company's merchandise mix and retail locations, the Company's reliance on a
 few key vendors for a majority of its merchandise purchases (including a
 significant portion from one key vendor), unseasonable weather, risks
 associated with foreign global sourcing, including political instability,
 changes in import regulations, disruptions to transportation services and
 distribution, economic conditions worldwide, any changes in business,
 political and economic conditions due to the threat of future terrorist
 activities in the United States or in other parts of the world and related
 U.S. military action overseas and the ability of the Company to execute its
 business plans effectively with regard to each of its business units. Any
 changes in such assumptions or factors could produce significantly
 different results. The Company undertakes no obligation to update
 forward-looking statements, whether as a result of new information, future
 events, or otherwise.
     April 4, 2007
 
     Mr. Hal N. Pennington
     Chairman, President and Chief Executive Officer
     Genesco Inc.
     1415 Murfreesboro Road
     Nashville, Tennessee  37217
 
     Dear Hal:
     As we have discussed previously, we have long admired and respected
 Genesco Inc. and what you and your team have accomplished. Through its
 differentiated retail banners, its multi-channel approach and its effective
 merchandising strategy, Genesco has performed very well.
     As we have stated publicly, Foot Locker, Inc. is actively seeking to
 acquire strong operators in the specialty footwear retailing arena. A
 combination with Genesco would clearly be consistent with this strategy.
 Over the past several months, our executive management team, Board of
 Directors, and advisors have devoted significant time and effort to
 analyzing the potential strategic benefits of combining our two companies.
 We concluded that a merger of our companies would enable both of us to
 benefit from mutual best practices, enhance our ability to serve our
 customers, and provide our employees and management teams with increased
 opportunities.
     Based on publicly available information, we would be prepared to
 acquire all the outstanding stock of Genesco for a consideration of $46.00
 per share in cash. We believe this proposal provides compelling value for
 Genesco's shareholders in that it represents:
     -- A significant premium above Genesco's all-time high stock price;
     -- A premium of 26 percent to Genesco's average trading pricing during the
        past year;
     -- An implied multiple of enterprise value to LTM EBITDA of 7.7x, which
        compares favorably to the current trading multiples of comparable
        specialty footwear and apparel retailers.
     This proposal has the unanimous support of our executive management
 team and our Board of Directors. Moreover, this proposal would not be
 subject to any financing condition, as we have sufficient sources of
 financing available.
     We have engaged Lehman Brothers as our strategic advisor and Skadden,
 Arps, Slate, Meagher & Flom LLP as our legal counsel. We and they are
 prepared to devote substantial resources toward ensuring an expedited
 process and the negotiation of a definitive agreement. Prior to the
 execution of such an agreement, we would expect to perform certain selected
 confirmatory due diligence. We believe this focused and concise review
 along with discussions with key Genesco personnel can be concluded within a
 very short period of time.
     Our proposal is submitted to you on a confidential basis. We hope that
 Genesco and its representatives will not publicly disclose this proposal so
 that our discussions can be held in confidence. This letter is not intended
 to be, and is not, a definitive agreement between us or in any way binding
 upon Foot Locker or Genesco, but is intended to express our indication of
 interest as of the date hereof. As stated, it is further subject to the
 completion of due diligence and the negotiation and execution of a mutually
 acceptable merger agreement. The parties will be bound only in accordance
 with such definitive agreement, if and when executed.
     We would welcome the opportunity to meet with you to discuss this
 opportunity further. I look forward to speaking with you again soon.
     Sincerely,
     Matthew D. Serra
 
 
     April 19, 2007
 
     Mr. Hal N. Pennington
     Chairman, President and Chief Executive Officer
     Genesco Inc.
     1415 Murfreesboro Road
     Nashville, Tennessee 37217
     Dear Hal:
     We are disappointed not yet to have received a substantive reply to my
 letter to you of April 4, 2007. In that letter, which followed contacts
 between us over the past several months, we stated that, based on publicly
 available information, we would be prepared to acquire all the outstanding
 stock of Genesco, Inc. for a consideration of $46 per share in cash, and we
 continue to be willing to proceed on that basis. As noted in our April 4
 letter, this represented a premium of 26 percent to Genesco's average
 trading price during the past year. As you know, the recent rise in
 Genesco's stock price has been affected by speculation regarding a possible
 sale of the company.
     We believe that a price of $46 per share represents significant value
 for Genesco's shareholders. We would welcome the opportunity to conduct
 selected due diligence, following which we may be prepared to increase our
 offer if increased value can be demonstrated.
     Given Genesco's failure to provide a substantive response to my April 4
 letter and recent public speculation, we thought it would be best for both
 of our organizations, and our respective shareholders, to make our position
 public. We therefore plan to release publicly a copy of this letter, as
 well as our letter to you of April 4, before the market opens tomorrow
 morning.
     This letter is not intended to be, and is not, a definitive agreement
 between us or in any way binding upon Foot Locker or Genesco, but is
 intended to express our indication of interest as of the date hereof. It is
 further subject to the completion of due diligence, and the negotiation and
 execution of a mutually acceptable merger agreement. The parties will be
 bound only in accordance with such definitive agreement, if and when
 executed.
     We continue to believe it would be in the best interests of Genesco's
 shareholders if we were able to have substantive discussions with you
 concerning a combination of our two companies. I look forward to speaking
 with you soon.
     Sincerely,
     Matthew D. Serra
 
 

SOURCE Foot Locker, Inc.