Footstar to Launch Thom McAn Footwear in Wal-Mart Stores; 300 Store Test in Select Stores Across the Country.

Business Editors

Footstar, Inc. (NYSE:FTS) today announced that it has reached an agreement with Wal-Mart Stores, Inc. to supply Thom McAn family footwear for 300 Wal-Mart stores beginning in October of this year.

Mickey Robinson, Chairman and Chief Executive Officer, commented, "We are very excited about this opportunity to expand Thom McAn, one of the fastest growing value footwear brands. In the four years since we reintroduced the brand it has grown to become one of the top fifty footwear brands in the country, with top of mind brand awareness of more than 75%. Wal-Mart will feature Thom McAn displays in its stores offering a variety of quality leather footwear for the entire family. Footstar is pleased to assist Wal-Mart in its efforts to broaden its selection of quality footwear at everyday low prices."

Footstar also confirmed that, as previously announced, it will begin operating the children's footwear departments in select Federated Department Stores, as well as the footwear departments in Gordman's department stores in July. Based on Footstar's current estimates, all of these new initiatives are expected to add $0.02 to $0.03 per share to its earnings in the second half of the year.

Footstar, Inc. is a leading footwear retailer. The Company offers a broad assortment of branded athletic footwear and apparel through its two athletic concepts, Footaction and Just For Feet and their websites, www.footaction.com and www.justforfeet.com, and discount and family footwear through licensed footwear departments operated by Meldisco, including 1,831 in Kmart stores of which Kmart has a 49% equity interest. As of June 29, 2002, the Company operated 476 Footaction stores in 41 states, Puerto Rico, and the U.S. Virgin Islands, 93 Just For Feet superstores located predominantly in the Southern half of the country and 5,863 Meldisco licensed footwear departments across the country.

FORWARD-LOOKING STATEMENT AND DISCUSSION OF BUSINESS RISKS: The foregoing discussion contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 and is based on current expectations, assumptions, estimates and projections. Forward-looking statements can be identified by such forward-looking terminology as "currently expects", "anticipates", "will," and similar statements or variations of such terms including any discussion of earnings targets or earnings estimates. The retail footwear and apparel business is highly competitive and such forward-looking statements involve significant material known and unknown risks and uncertainties which can cause actual results to differ materially from such forward-looking statements, including the possible substantial impact on the Company's business of the bankruptcy proceeding commenced by Kmart Corporation (at which the Company currently has approximately 1,800 licensed footwear departments) and potential adverse developments in such proceeding including: failing to successfully reorganize the chain; any significant store closings effected by Kmart as part of such proceeding to the extent such closings have a material impact on our business; and the impact of any other plans or activities effected by Kmart in such proceeding. Certain other risks and uncertainties include, but are not limited to: closing adjustments made during the course of closing the quarter, integration of business units, the continued independence and financial health of the Company's other significant licensors and customers; consumer demand for footwear; unseasonable weather; consumer acceptance of the Company's merchandise mix; retail locations; product availability; the effect of competitive products and pricing; and existing retail economic conditions including the impact on consumer spending and consumer confidence from a slowing economy and the impact of a highly promotional retail environment. These and other important factors that can cause actual results to differ materially from such forward-looking statements are also included in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission as well as in other periodic reports filed by the Company with the Securities and Exchange Commission. You are urged to consider all such factors. In light of the uncertainty inherent in such forward-looking statements, you should not consider their inclusion to be a representation that such forward-looking matters will be achieved or that current trends are an indication of future results. The Company assumes no obligation for updating any such forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements.