J. Baker, Inc. Announces the Sale of Footwear Business to Footstar; Transaction Marks Company's Exit From Licensed Footwear Business.

Business/Apparel Writers

CANTON, Mass.--(BUSINESS WIRE)--Feb. 5, 2001

J. Baker, Inc. (Nasdaq: JBAK) today announced that it has consummated the sale of its licensed footwear department businesses to Footstar, Inc. (NYSE:FTS) effective as of February 3, 2001. The closing of this transaction marks J. Baker's complete exit from the licensed retail footwear business. Under the Purchase Agreement entered into on November 16, 2000, J. Baker, Inc. will receive approximately $59.0 million for the assets sold to Footstar,

subject to post-closing adjustments. In addition, J. Baker expects to receive proceeds of approximately $2.0 million from the liquidation of inventory related to the closing of the Bradlees and Ann & Hope chains and the closing of 32 Ames stores, each of which was retained by J. Baker pursuant to the terms of the Purchase Agreement.

J. Baker also announced that it has entered into a new $110.0 million revolving credit facility with a syndicate of banks agented by Fleet Retail Finance Inc. and a $20.0 million term loan with Back Bay Capital Funding LLC. Both facilities mature on January 31, 2004. These agreements replace the Company's existing $160.0 million revolving credit facility and $25.0 million term loan, respectively. As with the prior agreements, these loans will be secured by substantially all of the assets of the Company and its subsidiaries.

Alan I. Weinstein, President and Chief Executive Officer of J. Baker, Inc., commented, "We believe this transaction represents the reallocation of resources to their highest and best use. It will enable us to allocate fully our management and capital resources to our big and tall and workwear businesses - which are in large, under-served niche markets in which we have a strong leadership position. We believe we have the best of breed big and tall men's apparel operation in the United States and look forward to growing this business. With our new strategic focus in place, we are committed to improving our financial flexibility by maximizing profits and reducing our debt. Under the ownership of Footstar, a truly leading footwear retailer, our former footwear businesses should enjoy greater efficiencies and economies of scale."

Mr. Weinstein continued, "J. Baker, Inc. and its predecessors have been in the footwear business since 1927. We are going to greatly miss the friends we have made in this business over these many years. We wish Footstar, our former employees, our licensors and our vendors the best of luck in the future."