The Finish Line Inc announced that following a thorough review of its growth opportunities, the Company has decided to close Paiva's fifteen stores and online business by the end of the third quarter. This decision enables the Company to focus capital on higher return opportunities.
"Consumer response to Paiva has been positive, however, we believe we can realize more acceptable returns in the near-term by directing resources toward the Company's core concepts," said Alan H. Cohen, Chief Executive Officer of The Finish Line.
In connection with today's announcement, the Company expects to record a pre-tax expense of approximately $21 million over the second and third quarters of fiscal 2008, consisting of approximately $12 million of long-term asset costs, $8 million of lease termination costs and $1 million of inventory write offs.
The Company is exploring opportunities to redeploy Paiva employees to positions in its Finish Line stores and therefore currently expects any severance costs to be de minimis.
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