Paul Fireman Quotations

take much longer for the Asia Pacific region to stabilize.

Two brands individually will add to the value,

While in the short term this is negatively impacting our operating results, we believe our strategy to reposition our business with Footlocker will help to improve our operating margins in the future.

Internationally, our business improved as compared with the prior year as a result of our business re-engineering efforts and improving economics in much of Asia Pacific. In Europe, we experienced market share gains in several countries and are pleased that for the sixth consecutive quarter we reported growth in our backlog on a local currency basis when compared to the prior year. During 1999 we took steps to reduce our operating costs by simplifying many business processes and focusing our efforts on fewer activities.

We expect these difficult industry conditions to persist well into the current year, as the industry works through its excess inventory,

The retail slowdown has continued in the first half of 1998 and has resulted in higher retail cancellations and returns, ... We believe that in the current environment many retailers are being more conservative in their future purchases, leaving more open-to-buy dollars available for at-once business. This situation, in combination with the unusually low at-once business in last year's second half, creates the potential for our performance to be better than our backlog trend indicates.

I think that collectively the stock is moving in the right direction. That's the most confidence building you can have. And we're making progress we're succeeding in bite size pieces and hopefully collectively we'll move to more synergistic growth and you know we've got a good plan we have a focus and we're happy about it.

The overall industry outlook is not improving in the short term, and the economic conditions in Asia Pacific and Latin America continue to negatively impact our business, ... The domestic market is suffering from heavy promotions at retail, which is affecting our performance. And the well publicized conditions in Japan and Korea, our two largest markets in the Far East, has caused reported sales to decline approximately 50 percent when compared to last year.

Fundamentally it's to bring back the creativity, the cutting edge forwardness of Reebok, what it always stood for. To do that we have to do it in step-by- step procedure, ... The first thing was to get everybody aligned and focused just on one strategic plan. Our mission is to discover, to design and to delight our consumer. And we're doing that every day now. We're getting closer to doing it better and better. We're maybe I would say 50-or-60 percent of the way there, but the consumer's only seeing 10 or 20 percent of it because it's yet to really reach market.

I am pleased with our earnings performance for the quarter, and I'm confident in our ability to execute our plans for 2001,