The Athlete’s Foot business in Australia and New Zealand will have improved profits thanks to a new licence deal signed by RCG Corporation Ltd with the US licensor. The group has paid US$6.2m for a 249 year term with no ongoing licence fees.

RCG chairman Ivan Hammerschlag said “This investment is an exceptionally sound deployment of our capital, one that provides us with excellent returns. It not only delivers long term certainty to the business but secures a significant increase in The Athlete’s Foot’s annual earnings and with that delivers substantial shareholder value.”

The increase in FY10 profit before tax as a result of the new agreements is expected to be approximately $1.2m. The Athlete’s Foot showed like-for-like sales growth of 17 percent for the six months to end of June 2009, resulting in total like-for-like sales growth of 11 percent for the full financial year.

New large format stores are being rolled out, with four already converted. Sales from these stores have increased by more than 30 percent, exceeding expectations.

“We are delighted with the performance of our new bigger format stores and will continue with the rollout in earnest. We expect to have at least 10 of these large format stores operational by Christmas 2009,” said Hammerschlag.