U.S. Shoe May Have Found A Good Fit

A big disappointment on Wall Street, U.S. Shoe may yet pull a surprise. "Practically everyone on the Street has given up on U.S. Shoe," says money manager Bob Buckman, who has traded in and out of the stock as it seesawed from 11 a share in December to 18 in March, then down to 12 in recent days. Buckman, a partner at Brandywine Asset Management, has been buying shares again, convinced that they will hit 20 in the next 12 months.

Buckman is betting that management will be able to boost sales at its LensCrafters division, which specializes in fast-service eyeglass retailing. The company, which operates nearly 300 LensCrafters stores, has put pilot LensCrafters "Sight & Save" express stores inside Kmart outlets in some cities to test the public's response toLensCrafters' discount optical products. If the response is good, U.S. Shoe plans to put up such "Sight & Save" discount stores in about 100 Kmart stores, says Buckman.

"That will create a dramatic impact on U.S. Shoe's bottom line," figures Buckman. He says the plan is to raise LensCrafters' earnings contribution to 50% from 18%. Women's apparel accounts for 49% of revenues and 61% of earnings. Shoes now account for 27% of revenues and 21% of earnings. "Shoes are still profitable, but there has been no growth," he says.

Buckman speculates that management will sell its shoe division once LensCrafters "gets rolling." Buckman thinks the company will earn $1.50 a share in 1993 and $2 in 1994, vs. 95c this year and 1991's $1.20.

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