Just For Feet Incorporation Of South Africa

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Just For Feet Incorporation In 1976, in his early thirties Harold Ruttenberg a native of South Africa and a successful businessman immigrated to the United States to avoid the political and economic turbulence within his home country. While living in South Africa Ruttenberg created a thriving retail business, but with the strict immigration laws in Africa he was only allowed to take $30,000 of his net worth with him to the U.S. Upon his arrival to the U.S. Ruttenberg began to settle in California to later realize with his limited resources, properties in that area were very expensive. Therefore, the strong-willed successful entrepreneur decided to move his wife and three children once more to an environment that was more affordable.…show more content…
By January 31, 1997 Just for Feet had reported profits of $13.9 million and by 1998 $26.7 million. Just for Feet had increasing revenues and profits making them the second largest retailer of athletic shoes in the nation. (Knapp, 2015) During the 1990’s Ruttenberg’s common stock was one of the most popular securities on Wall Street. Analysts and investors were impressed with the company’s 1998 fourth quarter operating results which included increases in same-store sale for twenty one quarters straight. What was even more impressive was the fact that Just for Feet continued thriving in a saturated market where major competitors were struggling to make a profit. By the late 1990’s Just Feet began to show red flags, their profits were continuing to rise while reporting a negative operating cash flow. In early 1999, the negative operating cash flow created a liquidity problem which resulting in Just for Feet selling 200 million of high yield junk bond. Thereafter, Just for Feet announced it may default on the outstanding bonds which alarmed investors and creditors. In July of 1999, Ruttenberg resigned as the CEO and was replaced by another CEO who specialized in turning failing corporations around. (Knapp, 2015) Unfortunately, Just for Feet continued to decline financially causing them to file for bankruptcy and ultimately liquidating their assets. After a series of investigations by state and
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