UNITED STATES OF AMERICA
                                              Before the
                                  SECURITIES AND EXCHANGE COMMISSION


      SECURITIES EXCHANGE ACT OF 1934
      Release No. 40142 / June 29, 1998

      ACCOUNTING AND AUDITING ENFORCEMENT
      Release No.  1049 / June 29, 1998            

      ADMINISTRATIVE PROCEEDING
      File No. 3-9638


                                                                   
                                          :
      In the Matter of                    :                                   
                                          :
      VENATOR GROUP, INC.,                : ORDER INSTITUTING PUBLIC
      formerly known as                   : PROCEEDINGS PURSUANT
      WOOLWORTH CORPORATION,              : TO SECTION 21C OF THE
      E. RONALD GAMBLE and                : SECURITIES EXCHANGE ACT
      LAURA T. KIRSNER,                   : OF 1934, MAKING FINDINGS
                                          : AND IMPOSING A CEASE-
                        Respondents.      : AND-DESIST ORDER
                                          :

                                                  I.

               The Securities and Exchange Commission ( Commission ) deems it appropriate 
      and in the public interest that public administrative proceedings be, and hereby are, 
      instituted pursuant to Section 21C of the Securities Exchange Act of 1934 ( Exchange Act )
      against Venator Group, Inc., formerly known as Woolworth Corporation ( Woolworth ), 
      E. Ronald Gamble ( Gamble ) and Laura T. Kirsner ( Kirsner ) (collectively, the  
      Respondents ). 





                                    ======END OF PAGE 1======






      II.

            In anticipation of the institution of these administrative proceedings, the
      Respondents have each submitted an Offer of Settlement (the  Offers ) which the Commission
      has determined to accept.<(1)>  Solely for the purpose of these proceedings and any
      other proceeding brought by or on behalf of the Commission, or to which the Commission is
      a party, and without admitting or denying the findings contained herein, the Respondents,
      by their Offers, consent to the entry of this order, and the findings and the imposition
      of the Cease-and-Desist Orders set forth below.

                                                 III.

                                                 FACTS

            The Commission finds:<(2)>

      A.    SUMMARY

            During each quarter of its fiscal year ended January 29, 1994 ( fiscal 1993 ),
      certain executives at Woolworth and two of its major subsidiaries engaged in a scheme to
      manage the company s reported earnings.  Specifically, the chief financial officers at the
      two subsidiaries, Kinney Shoe Corporation U.S. and Woolworth Canada, Inc., intentionally
      reported false and misleading quarterly financial results to Woolworth.  As a result,
      Woolworth s financial statements for the first three quarters of fiscal 1993 were
      materially misstated.  These materially misstated financial statements were included in
      the company s Forms 10-Q for the first three quarters of fiscal 1993.  In addition,
      Woolworth issued a press release announcing its fourth quarter financial results that
      contained materially misstated financial results for that quarter.  This fraudulent
      conduct enabled Woolworth to report a profit for each of the first two quarters of fiscal
      1993, even though it actually lost money during those quarters.  At one of the
      subsidiaries, Kinney Shoe Corporation U.S., the inaccurate reporting was perpetrated by
      Kinney s CFO, Selig Adler, at the direction of Charles T. Young, who was the company s
      Senior Vice President - Finance through June 30, 1993 and CFO from July 1, 1993 through
      May 1994.<(3)>  At another subsidiary, Woolworth Canada Inc., the inaccurate reporting
      was caused by Woolworth Canada s CFO, E. Ronald Gamble, with the knowledge of Young and
                                

          <(1)>    In determining to accept Woolworth s Offer, the Commission considered the 
                   remedial acts promptly undertaken by the company and the cooperation it 
                   afforded the Commission staff.


                 <(2)>    The  findings herein  are made  pursuant to Offers  of Settlement  
                          submitted by  Woolworth, Gamble and Kirsner and are not binding on 
                          any other person or entity in this or any other proceeding.

                 <(3)>    See SEC v. Charles T. Young and Selig Adler, Litigation Release No.                
                          (1998).


                        ======END OF PAGE 2======




                                          


      Laura T. Kirsner, the company s assistant controller.  In both instances, profits were
      inflated in certain quarters by understating cost of sales and deferring operating
      expenses, so that the company could report positive earnings.  Results were then adjusted
      in subsequent quarters so that results would be accurate by year-end, when the company was
      subject to an audit.  Further, Woolworth failed to use the best available financial
      information for quarterly reporting during fiscal 1993.  As a result, Woolworth s Forms
      10-Q filed with the Commission during fiscal 1993 were materially false and misleading.

            Woolworth restated its financial results for each quarter in fiscal 1993 as follows:







































                        ======END OF PAGE 3======




                                                                                                                


      Fiscal 1993
      Net Income (Loss)
      [000]

                        Quarter     Reported    Restated    Difference<(4)>
                        First       $1,000      $(  24,000) $( 25,000)
                        Second       2,000       (  10,000)  ( 12,000)
                        Third       (452,000)    (350,000)    102,000
                        Fourth       (46,000)    (111,000)   ( 65,000)


      B.    RESPONDENTS

            1.    Woolworth Corporation is a New York corporation with executive offices in New
      York, New York.  The company s wholly owned subsidiaries include Kinney and Woolworth
      Canada.  Woolworth s common stock is registered with the Commission pursuant to Section
      12(b) of the Exchange Act and listed on the New York Stock Exchange.  As of February 1997,
      approximately 134 million shares of Woolworth common stock were outstanding. At all times
      relevant hereto, Woolworth was required to file reports with the Commission pursuant to
      Section 13(a) of the Exchange Act.

            2.    E. Ronald Gamble, age 56, was chief financial officer of Woolworth Canada and
      a member of Woolworth Canada's board of directors at all relevant times.  Gamble
      voluntarily resigned from Woolworth Canada in January 1995.  He is a certified management
      accountant in Canada.

            3.    Laura T. Kirsner was the assistant controller of Woolworth at all relevant
      times.  Kirsner voluntarily resigned from the company in October 1994.  She is a certified
      public accountant licensed to practice in New York since 1973.

      C.    WOOLWORTH SUBSIDIARIES REPORTED 
            INACCURATE QUARTERLY RESULTS DURING FISCAL 1993    

            During fiscal 1993, senior officers at two Woolworth subsidiaries intentionally
      reported inaccurate quarterly financial results for those subsidiaries.  Those inaccurate
      results were incorporated into Woolworth s financial statements included in its Forms 10-Q
      for the first three quarters and into a press release announcing Woolworth s fourth
      quarter financial results. At Kinney, the inaccurate reporting was done in response to a
                                

          <(4)>    The differences between Woolworth s reported and restated quarterly 
                   financial results are not solely because of the misstatements discussed 
                   herein.  Specifically, Woolworth established a $480 million restructuring 
                   reserve in the third quarter of fiscal 1993 to account for approximately 
                   970 store closings.  In the fourth quarter of  fiscal 1993 Woolworth 
                   initially reversed a portion of this reserve.  When the company restated 
                   its fiscal 1993 quarterly results, the fourth quarter reversal of the 
                   reserve was moved to the third quarter.  Thus, the restated financial 
                   results for both the third and fourth quarters reflect additional 
                   adjustments unrelated to the conduct described herein.

                                           ======END OF PAGE 4======




                                                                              

      directive from a member of senior corporate management at the company.  At Woolworth
      Canada, the inaccurate reporting was accomplished with the knowledge of certain members of
      the company s senior corporate management.  In both instances, profits were inflated in
      certain quarters to help the company report positive earnings and understated in other
      quarters so that year-end results would be accurate.

            1.    Kinney s Inaccurate Reporting

            At the end of each of the second and third quarters of fiscal 1993, Woolworth's
      chief financial officer directed Kinney s chief financial officer to report false
      quarterly financial results for Kinney in order to inflate Woolworth's publicly reported
      quarterly earnings.  In each of these quarters, Woolworth s chief financial officer
      directed Kinney to report a specified but unsupported increase in operating profit for
      that quarter.

            In response to these directions, Kinney's chief financial officer changed Kinney's
      results for the second and third quarters of fiscal 1993 to improperly increase Kinney's
      gross profit margins by approximately $19.8 million and $8.9 million, respectively.  In
      the fourth quarter, Kinney s chief financial officer purposefully understated Kinney's
      gross profits to compensate for the overstatements in the prior quarters.


            2.    Woolworth Canada's Inaccurate Reporting

            During fiscal 1993, Woolworth Canada also reported false interim results to
      Woolworth.  Woolworth Canada falsified its interim results by improperly increasing its
      gross profit margins and decreasing operating expenses.  Woolworth Canada's chief
      financial officer, E. Ronald Gamble, was under pressure from Woolworth to report strong
      results so that the company could report earning one cent per share for each quarter in
      the first half of fiscal 1993.  When Gamble received Woolworth Canada's preliminary
      results from the general ledger each month in fiscal 1993, he adjusted those results in
      order to smooth expenses over the entire year and to bring Woolworth Canada's results into
      line with the company s internal forecasts. 

            Each month, Gamble instructed Woolworth Canada's controller to report the
      fraudulently adjusted results to Woolworth.  Gamble also created variance reports to track
      his adjustments to the general ledger results and shared these with his superior at
      Woolworth Canada.  Woolworth Canada's controller found these adjustments to be somewhat
      irregular and he too created variance reports to track them.  Woolworth Canada's
      controller sent copies of some of his variance reports to, among others, Woolworth's
      assistant controller, Laura T. Kirsner, and he discussed the variances with Woolworth's
      chief financial officer and Kirsner. Kirsner became aware of these variances between
      Woolworth Canada's general ledger and its reported interim results sometime in early
      fiscal 1993.  Kirsner purportedly believed that the variances resulted from differences
      between a computerized point-of-sale system and Woolworth Canada s interim reporting
      methods.  Although Kirsner was concerned by the size of the cumulative variance in the
      second quarter, and she discussed her concerns with others, she failed to take all steps

                        ======END OF PAGE 5======




                                             

      necessary to ensure that Woolworth s interim financial statements were prepared in
      conformity with generally accepted accounting principles ( GAAP ).  Instead, Kirsner
      incorrectly concluded that the variances were not material.

            In the first half of fiscal 1993, Gamble made adjustments to increase gross profit
      margins and decrease operating expenses; Gamble then reversed these adjustments in the
      second half of the year to achieve accurate year-end results.  For the first two quarters
      of fiscal 1993, Gamble improperly overstated Woolworth Canada s gross profit margins by
      approximately $3.9 million and $8.7 million, respectively, and he improperly understated
      Woolworth Canada s selling, general and administrative expenses by approximately $7.2
      million and $2.4 million, respectively.  For the last two quarters of fiscal 1993, Gamble
      improperly understated Woolworth Canada s gross margins and overstated Woolworth Canada's
      selling, general and administrative expenses to offset the misstatement of the financial
      results in the first part of the fiscal year.


































                        ======END OF PAGE 6======




                                                                             




       
      D.    IN FISCAL 1993, WOOLWORTH FAILED TO USE
            THE BEST AVAILABLE FINANCIAL INFORMATION
            FOR PURPOSES OF INTERIM FINANCIAL REPORTING                            
                 
            By fiscal 1993, Kinney and Woolworth Canada had timely access to financial
      information from a computerized point-of-sale system known internally as the Departmental
      Operating Statement ("DOS").  The DOS contained all the information necessary to calculate
      actual cost of sales on an interim basis and provided the best available financial data,
      including actual markdowns.  For year-end reporting purposes, Woolworth calculated cost of
      sales based on actual information from the DOS.    However, in calculating cost of sales
      on a quarterly basis, Kinney used an estimation method which was referred to internally as
      the  Kinney method.   Generally, the Kinney method utilized an annualized gross profit
      margin estimate for interim reporting, which had the effect of smoothing out variations in
      actual cost of sales on a quarterly basis, such as those resulting from heavy markdowns in
      a particular quarter.  Woolworth Canada also used the Kinney method to calculate cost of
      sales for interim reporting for one of its two divisions.  To the extent that the actual
      cost of sales for the year based on the DOS differed from the estimated cost of sales
      calculated for interim reporting purposes, the Woolworth divisions using the Kinney method
      adjusted for the difference in the fourth quarter.

            In addition to the year-end results, the interim financial results computed using
      DOS-generated figures were more accurate than those generated by the Kinney method. 
      Accordingly, for interim reporting purposes in fiscal 1993, Kinney and Woolworth Canada
      should have used the results from the DOS rather than those generated by application of
      the Kinney method.  Woolworth, in turn, should have reported its results of operations
      based on those DOS figures in its quarterly financial statements included in its Forms 10-
      Q for its first three quarters of fiscal 1993 and in the fourth quarter press release.  

            Woolworth s failure to use DOS-generated figures at Kinney had a material impact on
      the company s reported earnings during fiscal 1993.  During the first quarter of fiscal
      1993, Woolworth overstated pre-tax earnings by approximately $27.6 million compared to the
      DOS figures; during the second quarter the overstatement was approximately $8.3 million. 
      During both of those quarters,  the company reported earning a profit when it had actually
      experienced losses.   In the latter part of the year, the first and second quarter
      overstatements were adjusted so that the company's reported annual results equaled the
      annual results based on DOS.
      IV.

                                           LEGAL DISCUSSION

      A.    THE ANTIFRAUD PROVISIONS -- SECTION 10(B)
            OF THE EXCHANGE ACT AND RULE 10b-5 THEREUNDER

            Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder, prohibit material
      misstatements or omissions, made with scienter, in connection with the purchase or sale of
      securities.  SEC v. Texas Gulf Sulphur Co., 401 F.2d 833, 860-862 (2d Cir. 1968), cert.

                        ======END OF PAGE 7======




                                              
      denied, 394 U.S. 976 (1969).  Recklessness or willful disregard of the truth generally
      satisfies the scienter requirement.  See, e.g., Hollinger v. Titan Capital Corp., 914 F.2d
      1564 (9th Cir. 1990); SEC v. Blavin, 760 F.2d 706, 711 (6th Cir. 1985); SEC v. Falstaff
      Brewing Corp., 629 F.2d 62, 77 (D.C. Cir. 1980); Rolf v. Blyth Eastman Dillon & Co., 570
      F.2d 38, 46 (2d Cir. 1978), cert. denied, 439 U.S. 1039 (1978).   A fact is material if
      there is a substantial likelihood that a reasonable investor would consider the
      information to be important.  Basic, Inc. v. Levinson, 485 U.S. 224, 231-32 (1988). 

            Gamble was the chief financial officer of a major company subsidiary, Woolworth
      Canada, which falsified financial results that comprised a material portion of the
      misleading information contained in Woolworth s Forms 10-Q for the first three quarters of
      fiscal 1993.  Gamble adjusted Woolworth Canada s records in order to smooth reported
      income and bring Woolworth Canada s interim results in line with the company's internal
      forecasts.  Gamble s conduct resulted in the deliberate misstatement of the company s
      quarterly reports, which were materially false and misleading as a result, and constitutes
      a violation of the antifraud provisions of the Exchange Act.
































                        ======END OF PAGE 8======




                                    

      B.    THE REPORTING PROVISIONS -- SECTION 13(a) OF THE
            EXCHANGE ACT AND RULES 13a-13 AND 12b-20 THEREUNDER

            Section 13(a) of the Exchange Act and Rule 13a-13 thereunder require issuers of
      registered securities to file with the Commission factually accurate quarterly reports. 
      See,  e.g., SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1165 (D.C. Cir. 1978), cert. denied,
      440 U.S. 913 (1979).  In addition, Exchange Act Rule 12b-20 requires that periodic reports
      contain all information necessary to ensure that statements made in such reports are not
      materially misleading.  No showing of scienter is necessary to establish a violation of
      Section 13(a).  Savoy Indus., 587 F.2d at 1167.

            Woolworth violated Section 13(a) of the Exchange Act and Rules 13a-13 and 12b-20
      thereunder by filing quarterly reports for the first three quarters of fiscal 1993 that
      contained materially false and misleading financial information, including overstated
      profits and understated expenses.  Gamble caused the company s violations of Section
      13(a), and Rules 12b-20 and 13a-13 thereunder, by overstating Woolworth Canada s income in
      the first half of fiscal 1993, and then understating it in the second half of fiscal 1993. 
      Kirsner was responsible with others for the preparation of the interim financial
      statements included in Woolworth s periodic reports filed with the Commission.  Kirsner
      was aware of the variances between Woolworth Canada s general ledger results and the
      results Woolworth Canada reported to Woolworth, and she knew, or should have know, that
      the company s interim financial statements were not prepared in conformity with GAAP.  As
      a result, Kirsner caused the company s violations of Exchange Act Sections 13(a) and Rules
      13a-13 and 12b-20.   

      C.    THE RECORD-KEEPING AND INTERNAL CONTROLS PROVISIONS -- SECTIONS 13(b)(2)(A) and
            13(b)(2)(B) OF THE EXCHANGE ACT 

            Section 13(b)(2)(A) of the Exchange Act requires a reporting company to make and
      keep books, records, and accounts, which, in reasonable detail, accurately and fairly
      reflect its transactions and disposition of assets.  Rule 13b2-1 of the Exchange Act
      prohibits any person from directly or indirectly falsifying a book, record or account
      subject to Section 13(b)(2)(A).  Section 13(b)(2)(B) of the Exchange Act requires every
      reporting company to devise and maintain a system of internal accounting controls
      sufficient to provide reasonable assurances that transactions are recorded as necessary to
      permit preparation of financial statements in conformity with GAAP. 










                        ======END OF PAGE 9======


                                                              
                                                                                                                                                                             
                                            

            Woolworth violated Exchange Act Section 13(b)(2)(A) by maintaining false and
      misleading books, records and accounts concerning the gross profit margins and expenses of
      Woolworth s subsidiaries Kinney and Woolworth Canada.  As a result Woolworth's books and
      records during the relevant period failed to reflect fairly and accurately the company's
      financial results.

            In addition, Woolworth violated Exchange Act Section 13(b)(2)(B) by failing to
      implement procedures designed to provide reasonable assurances that its subsidiaries 
      reported interim financial results reflected their actual results.

            Gamble adjusted general ledger results to overstate Woolworth Canada s income in the
      first half of fiscal 1993, and then understate it in the second half of fiscal 1993,
      thereby falsifying Woolworth s books and records in direct violation of Rule 13b2-1.  He
      also failed to ensure that the company maintained adequate internal accounting controls
      concerning the proper reporting of Woolworth Canada s results.  As a result, Gamble caused
      the company s violations of Sections 13(b)(2)(A) and 13(b)(2)(B).

            Kirsner knew that Woolworth Canada s reported financial results were different than
      the financial results reflected in Woolworth Canada s general ledger.  By failing to take
      all necessary steps to investigate and resolve these variances, Kirsner also caused the
      company s violations of Exchange Act Sections 13(b)(2)(A) and 13(b)(2)(B). 

      V.

      FINDINGS

            Based on the foregoing, the Commission finds:  

            (A)  That Woolworth violated Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the
      Exchange Act and Rules 12b-20 and 13a-13 thereunder; 

            (B) That Gamble violated Section 10(b) of the Exchange Act and Rules 10b-5 and 13b2-
      1 thereunder, and caused Woolworth s violations of Sections 13(a), 13(b)(2)(A) and
      13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder; and 

            (C) That Kirsner caused Woolworth s violations of Sections 13(a), 13(b)(2)(A) and
      13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder.

      VI.

      OFFERS OF SETTLEMENT

            The Respondents each have submitted Offers of Settlement that the Commission has
      determined to accept.  Without admitting or denying the findings herein, Respondents
      consent to the Commission's issuance of this Order which makes findings, as set forth
      above, and orders that: (i)  Woolworth cease and desist from committing any violation and
      any future violation of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act

                        ======END OF PAGE 10======




                                                                                                                 


      and Rules 12b-20 and 13a-13 thereunder; (ii) Gamble cease and desist from committing any
      violation and any future violation of Section 10(b) of the Exchange Act and Rules 10b-5
      and 13b2-1 thereunder, and from causing any violation and any future violation of Sections
      13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-13
      thereunder; and (iii) Kirsner cease and desist from causing any violation and any future
      violation of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules
      12b-20 and 13a-13 thereunder.

      VII.

      ORDER

            Accordingly, IT IS HEREBY ORDERED, pursuant to Section 21C of the Exchange Act:

            (A)  That Woolworth cease and desist from committing any violation and any future
      violation of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules
      12b-20 and 13a-13 thereunder;

            (B)  That Gamble cease and desist from committing any violation and any future
      violation of Section 10(b) of the Exchange Act and Rules 10b-5 and 13b2-1 thereunder, and
      from causing any violation and any future violation of Sections 13(a), 13(b)(2)(A) and
      13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder; and


























                        ======END OF PAGE 11======




                                           






            (C)  That Kirsner cease and desist from causing any violation and any future
      violation of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules
      12b-20 and 13a-13 thereunder.

            By the Commission.


                                    
            Jonathan G. Katz
            Secretary




































                        ======END OF PAGE 12======




                                              ======END OF PAGE 12======