For more than 30 years, Foot Locker has been the premier athletic footwear and apparel specialty retailer in the world. The Company’s flagship division, Foot Locker, offers a wide selection of the latest styles of athletic footwear and apparel to its target customer, a 12-to- 24 year old male influenced by competitive sports and urban trends. At year-end 2006, Foot Locker operated a total of 2,101 stores in 20 countries, with 1,368 stores located in the United States, 509 stores in Europe, 132 stores in Canada and 92 stores in the Asia/Pacific region. The average size of these stores is 3,600 gross square feet.

A key benefit to operating a successful global business is employing local management teams around the world that have a sound understanding of their specific markets, including knowledge of current fashion trends, the competitive environment and operating dynamics. Through the sharing of information across all divisions of the Company, Foot Locker is able to react quickly to developing fashion trends. Recently, for example, product and fashion insights from Foot Locker Europe enabled the Company’s North American divisions to anticipate developing trends that might influence the American customer base.

Given Foot Locker’s success in penetrating the global marketplace, the Company continues to pursue opportunities for further growth actively, both in the U.S. and in international markets.

Through an agreement with a third-party franchisee, Foot Locker franchised stores have been opened in the Middle East. Over the next several years, the Company expects that 75 Foot Locker franchised stores will be operating in this region. Additional franchised operations may be pursued over time.