FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For The Quarterly Period Ended  March 29, 1997

Commission File Number   1-11681

                                 FOOTSTAR, INC.
             (Exact Name of Registrant as specified in its charter)

           Delaware                                     22-3439443
(State or other Jurisdiction of          (I.R.S. Employer Identification Number)
 Incorporation or Organization)

                933 MacArthur Boulevard, Mahwah, New Jersey 07430
               (Address of principal executive offices) (Zip Code)

                                 (201) 934-2000
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                Yes _X_   No ___

Number of shares outstanding of the issuer's Common Stock:

         Class                                 Outstanding as of May 7, 1997
         -----                                 -----------------------------

    Common Stock, $.01 par value                         30,533,883

<PAGE>

                                      INDEX

Part I. - Financial Information                                         Page No.
                                                                        --------

  Consolidated Condensed Statements of Operations -
    Three Months Ended March 29, 1997 and March 30, 1996                 3

  Consolidated Condensed Balance Sheets -
    March 29, 1997 and December 28, 1996                                 4

  Consolidated Condensed Statements of Cash Flows -
    For Three Months Ended March 29, 1997 and March 30, 1996             5

  Notes to Consolidated Condensed Financial Statements                   6 - 9

  Management's Discussion and Analysis of
    Financial Condition and Results of Operations                        10 - 14

  Review by Independent Auditors                                         15

  Exhibit 1 - Independent Auditors' Review Report                        16

Part II. - Other Information

  Item 6 - Exhibits and Reports on Form 8-K                              17


                                       2
<PAGE>

                     FOOTSTAR, INC. AND SUBSIDIARY COMPANIES
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                     ($ in millions, except per share data)

                                                         Three Months Ended
                                                       -----------------------
                                                       March 29,     March 30, 
                                                         1997          1996
                                                       ---------     ---------
                                                                   
Net sales                                               $ 376.9       $ 336.9
Cost of sales                                             270.5         243.3
                                                        -------       -------
   Gross profit                                           106.4          93.6
Store operating, selling, general                                  
  and administrative expenses                              91.4          83.7
Depreciation and amortization                               7.6           5.7
                                                        -------       -------
Operating profit                                            7.4           4.2
Interest income, net                                        1.4           5.3
                                                        -------       -------
Income from continuing operations before                           
  income taxes and minority interests                       8.8           9.5
Provision for income taxes                                  3.0           3.2
                                                        -------       -------
Income from continuing operations before                           
  minority interests                                        5.8           6.3
Minority interests in net income                            0.8           0.2
                                                        -------       -------
Income from continuing operations                           5.0           6.1
Loss from discontinued operations, net of                          
  income tax benefit of $31.6                              --           (54.6)
                                                        -------       -------
Net income (loss)                                       $   5.0       $ (48.5)
                                                        =======       =======
                                                                   
Weighted average shares outstanding (in millions)          30.6    
                                                        =======
Earnings per share                                      $  0.16    
                                                        =======
                                                                   
     See accompanying notes to consolidated condensed financial statements.


                                       3
<PAGE>

                     FOOTSTAR, INC. AND SUBSIDIARY COMPANIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                    ($ in millions, except for share amounts)

                                                         March 29,  December 28,
                                                           1997         1996
                                                        (Unaudited)  (Audited)
                                                         ---------   ---------
  ASSETS
  Current Assets:
     Cash and cash equivalents                           $    62.9   $   164.6
     Accounts receivable, net                                 56.3        77.7
     Inventories                                             327.0       281.9
     Prepaid expenses and other current assets                54.0        59.9
                                                         ---------   ---------
  Total current assets                                       500.2       584.1
                                                         ---------   ---------
     Property and equipment, net                             203.2       197.0
     Deferred charges and other non-current assets            50.6        51.0
                                                         ---------   ---------
  Total assets                                           $   754.0   $   832.1
                                                         =========   =========

  LIABILITIES and SHAREHOLDERS' EQUITY
  Current Liabilities:
     Accounts payable                                    $    77.7   $    79.8
     Accrued expenses                                        182.5       215.6
     Income taxes payable                                     20.1        29.3
                                                         ---------   ---------
  Total current liabilities                                  280.3       324.7
                                                         ---------   ---------
     Other long-term liabilities                              55.4        58.5
     Minority interests in subsidiaries                       29.9        65.0
                                                         ---------   ---------
  Total liabilities                                          365.6       448.2
                                                         ---------   ---------
  Shareholders' equity:
     Common stock $.01 par value: 100,000,000
       shares authorized, 30,533,883 shares
       issued and outstanding                                  0.3         0.3
     Additional paid-in capital                              323.6       323.6
     Equity adjustment from foreign
       currency translation                                   (0.6)       (0.4)
     Retained earnings                                        65.1        60.4
                                                         ---------   ---------
Total shareholders' equity                                   388.4       383.9
                                                         ---------   ---------
Total liabilities and shareholders' equity               $   754.0   $   832.1
                                                         =========   =========

     See accompanying notes to consolidated condensed financial statements.


                                       4
<PAGE>

                     FOOTSTAR, INC. AND SUBSIDIARY COMPANIES
                 CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
                                   (Unaudited)
                                 ($ in millions)

                                                           Three Months Ended
                                                          ---------------------
                                                          March 29,   March 30, 
                                                            1997        1996
                                                          ---------   ---------

Net cash used in operating activities                     $   (42.4)  $   (33.4)
                                                          ---------   ---------

Cash flows from (used in) investing activities:
   Additions to property and equipment                        (13.6)      (10.5)
   Proceeds from the sale or disposal of property
     and equipment                                             --           3.4
                                                          ---------   ---------
   Net cash used in investing activities                      (13.6)       (7.1)
                                                          ---------   ---------

Cash flows from (used in) financing activities:
   Dividends paid to minority interests                       (35.9)       --
   Decrease in book overdrafts                                 (9.4)      (17.8)
   Decrease in due from parent and other divisions             --          56.9
   Other                                                       (0.4)       --
                                                          ---------   ---------
   Net cash (used in) provided by financing
     activities                                               (45.7)       39.1
                                                          ---------   ---------
Net decrease in cash and cash equivalents                    (101.7)       (1.4)

Cash and cash equivalents at beginning of period              164.6        26.3
                                                          ---------   ---------

Cash and cash equivalents at end of period                $    62.9   $    24.9
                                                          =========   =========

     See accompanying notes to consolidated condensed financial statements.


                                       5
<PAGE>

                     FOOTSTAR, INC. AND SUBSIDIARY COMPANIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)
                     ($ in millions, except per share data)

1. Basis of Presentation

In the opinion of Footstar, Inc. (the "Company"), the accompanying unaudited
consolidated condensed financial statements contain all adjustments (consisting
of only normal recurring accruals) necessary to present fairly the financial
position of the Company as of March 29, 1997 and the results of operations and
cash flows for the three-month periods ended March 29, 1997 and March 30, 1996.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expense during the
reporting period. Actual results could differ from those estimates. Because of
the seasonality of the specialty retailing business, operating results of the
Company on a quarterly basis may not be indicative of operating results for the
full year. The consolidated condensed financial statements of the Company should
be read in conjunction with the financial statements of the Company included in
the Company's 1996 Annual Report on Form 10-K.

The Board of Directors of the Company approved on December 5, 1996 a change to a
fiscal year ending on the Saturday closest to December 31 from a calendar year.
Fiscal 1996 ended on December 28, 1996 and fiscal 1997 will end January 3, 1998
and will be a 53-week year.

2. Earnings per Share

Earnings per share information has been omitted from the accompanying
consolidated statements of operation for the three months ended March 30, 1996,
since the Company was not a separate entity with its own capital structure. The
spin-off was completed with the distribution (the "Distribution") on October 12,
1996 to the Melville Corporation ("Melville") shareholders of record on October
2, 1996 of all the shares of the Company. See Note 4 with respect to pro forma
earnings per share. Earnings per share are calculated by dividing net income
(loss) by the weighted average shares outstanding, which included common stock
equivalents.

In March 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings Per Share," which established new standards for computing and
presenting earnings per share. SFAS No. 128 will be effective for interim and
annual financial statements after December 15, 1997. The Company believes that
the adoption of SFAS No. 128 will not have a material impact on the Company's
reported earnings per share. The table below shows pro forma calculated earnings
per share in accordance with SFAS No. 128.


                                       6
<PAGE>

                     FOOTSTAR, INC. AND SUBSIDIARY COMPANIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)
                     ($ in millions, except per share data)

2. Earnings per Share (Continued)

                                                             Pro forma
                                                         Three Months Ended
             ($ in millions, except per share data)        March 29, 1997
             --------------------------------------      ------------------

             Basic EPS Computation                                
             Numerator:
               Income from continuing operations         $              5.0
                                                         ==================
             Denominator:                                     
               Average common shares outstanding                 30,533,883
                                                         ==================
                                                              
             Basic EPS                                   $             0.16
                                                         ==================
                                                              
             Diluted EPS computation                          
             Numerator:                                       
               Income from continuing operations         $              5.0
                                                         ==================
             Denominator:                                     
               Average common shares outstanding                 30,533,883
               Dilutive effect of stock options                      77,503
                                                         ------------------
                   Total shares                                  30,611,386
                                                         ==================
                                                              
             Diluted EPS                                 $             0.16
                                                         ==================
                                                          
                                                 


3.  Supplemental Cash Flow Information

                                                     Three Months Ended
                                              ----------------------------------
                                              March 29, 1997      March 30, 1996
                                              --------------      --------------

             Cash paid for income taxes             $7.3                $1.3
             Cash paid for interest                 $0.4                $0.2


                                       7
<PAGE>

                     FOOTSTAR, INC. AND SUBSIDIARY COMPANIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)
                     ($ in millions, except per share data)

4. Pro Forma Statements of Operation

The following table represents a comparison of the Company's actual results for
the three-month period ended March 29, 1997 and pro forma consolidated condensed
statements of operations for the three-month period ended March 30, 1996. Pro
forma results assume that the Distribution and related transactions and events
occurred as of the beginning of 1996. Pro forma financial information is
presented for informational purposes only and may not reflect the future results
of the Company or what the results would have been had the Company been operated
as a separate company.

                                                       Three Months Ended
                                                --------------------------------
                                                March 29, 1997    March 30, 1996
                                                    Actual          Pro forma 
                                                  ---------         ---------
                                                                   
     Net sales                                    $   376.9         $   336.9
     Cost of sales                                    270.5             243.3
                                                  ---------         ---------
        Gross profit                                  106.4              93.6
     Store operating, selling, general                             
       and administrative expenses                     91.4              86.9
     Depreciation and amortization                      7.6               5.7
                                                  ---------         ---------
        Operating profit                                7.4               1.0
     Interest income, net                               1.4               0.0
                                                  ---------         ---------
     Income from continuing operations before                      
       income taxes and minority interests              8.8               1.0
     Provision (benefit) for income taxes               3.0              (0.1)
                                                  ---------         ---------
     Income from continuing operations                  5.8               1.1
     Minority Interest                                  0.8               0.2
                                                  ---------         ---------
     Net Income                                   $     5.0         $     0.9
                                                  =========         =========
     Weighted average shares outstanding                           
       (in millions)                                   30.5              30.6
                                                  =========         =========
     Earnings per share                           $    0.16         $    0.03
                                                  =========         =========

The pro forma results have been derived from the historical financial results
and principally reflect the following:

a)   The elimination of Melville expense allocation and the anticipated net
     increase in overhead to add functional areas required to be a stand-alone
     public company.

b)   The elimination of net interest income relating to intercompany balances
     due to the recapitalization of the Company.


                                       8
<PAGE>

                     FOOTSTAR, INC. AND SUBSIDIARY COMPANIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)
                     ($ in millions, except per share data)

4. Pro Forma Statements of Operation (Continued)

c)   The net change in provision for income taxes. The pro forma adjustments
     were tax effected at 39%, which approximates the Company's blended
     statutory rate.

d)   Pro forma earnings per common share assume that the common stock issued on
     the distribution date had been issued at the beginning of 1996 after giving
     effect to common stock equivalents arising from deferred stock awards.


                                       9
<PAGE>

                     FOOTSTAR, INC. AND SUBSIDIARY COMPANIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

Footstar, Inc. (the "Company") became an independent company after the Board of
Directors of Melville Corporation ("Melville") approved the spin-off of its
footwear operations. The spin-off was completed with the distribution (the
"Distribution") on October 12, 1996 to the Melville shareholders of record on
October 2, 1996 of all the shares of the Company.

Prior to the Distribution, Meldisco, Footaction and Thom McAn were operated as
part of Melville. The historical financial information presented herein reflects
periods during which the Company did not operate as a separate company, and
accordingly, certain assumptions were made in preparing such financial
information. Such information, therefore, may not necessarily reflect the
results of operations or the financial condition of the Company which would have
resulted had the Company been a stand-alone public company during the reporting
periods, and are not necessarily indicative of the company's future operating
results or financial condition. On June 3, 1996, Melville announced the
discontinuance of the Thom McAn segment. Accordingly, the results of operations
for the Thom McAn segment have been classified as discontinued operations for
all periods presented. In connection with the discontinuation of Thom McAn, the
Company recorded a pre-tax charge of approximately $85.0 million in the first
quarter of 1996. The charge primarily relates to future operating losses during
the wind-down period, lease settlement costs, asset write-offs and severance
costs.


                                                        Three Months Ended     
                                                     ------------------------
                                                     March 29,      March 30,
          ($ in millions)                              1997           1996  
                                                     ---------      ---------
                                                                    
          Company:                                                  
          Net Sales                                  $   376.9      $   336.9
          Net sales % change from prior year              11.9%           3.4%
          Same store sales % change                        5.7%           4.7%
                                                                    
          Meldisco:                                                 
          Net Sales                                  $   239.2      $   226.8
          Net sales % change from prior year               5.5%          (6.5%)
          Same store sales % change                        4.6%          (4.2%)
          % of consolidated net sales                     63.5%          67.3%
                                                                    
          Footaction:                                               
          Net Sales                                  $   137.7      $   110.1
          Net sales % change from prior year              25.1%          32.3%
          Same store sales % change                        8.1%          31.2%
          % of consolidated net sales                     36.5%          32.7%


                                       10
<PAGE>

                     FOOTSTAR, INC. AND SUBSIDIARY COMPANIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Net sales for the first quarter ended March 29, 1997, were $376.9 million, an
increase of 11.9% from net sales of $336.9 million for the first quarter of
1996. Same store sales for the quarter increased by 5.7% compared to the same
quarter in 1996. The Easter week selling period fell in the first quarter of
1997 and was included in the second quarter of 1996. Driven by a solid
merchandise assortment, a 23.3% increase in square footage and an 8.1% increase
in comparable store sales, Footaction posted a 25.1% sales increase over the
prior year. Meldisco, benefitting from the earlier Easter season, showed a 5.5%
sales increase and a 4.6% gain in same store sales over last year.

Cost of Sales and Expenses

                                                Three Months Ended     Pro Forma
                                               --------------------    ---------
                                               March 29,  March 30,    March 30,
     (As a percent of net sales)                  1997       1996         1996
                                               ---------  ---------    ---------
                                                                      
     Cost of sales                                71.8%      72.2%        72.2%
     Store operating, selling, general and                            
        administrative expenses*                  24.2%      24.8%        25.8%
     Depreciation and amortization                 2.0%       1.7%         1.7%
                                                                   
     ------
     * Includes allocations from Melville for the first quarter of 1996.

Cost of Sales

Cost of sales for the first quarter of 1997 decreased 40 basis points from the
corresponding prior-year period. Both divisions experienced higher gross margins
in the first quarter of 1997. The contributing factors to Meldisco's improvement
were higher initial markups, lower markdowns offset in part by higher delivery
costs due to increased shipping volumes in preparation for an earlier Easter
peak selling season. Footaction's improvement is due to higher initial markups,
the leveraging of fixed occupancy costs offset by higher markdowns.

Store Operating, Selling, General and Administrative Expenses

First Quarter 1997 vs. First Quarter 1996--Historical Basis

Store operating, selling, general and administrative expenses were 60 basis
points lower in the first quarter of 1997 as compared to the same period the
prior year. Lower administrative costs resulted from outsourcing of information
systems and reduced payroll costs.


                                       11
<PAGE>

                     FOOTSTAR, INC. AND SUBSIDIARY COMPANIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This was partially offset by the costs incurred relating to the addition of
functional areas required to support a stand-alone public company and
nonrecurring charges of $1.3 million relating to the exit of operations in
Mexico.

First Quarter 1997 vs. Pro Forma First Quarter 1996

Store operating, selling, general and administrative expenses as a percentage of
sales for the first quarter  decreased  from the comparable  1996 periods.  Both
divisions,  Meldisco and Footaction, were able to leverage their fixed operating
costs due to higher sales levels.

Operating Profit

                                          Three Months Ended               
                         -----------------------------------------------------
                                                                  Pro Forma
($ in millions)          March 29, 1997     March 30, 1996      March 30, 1996
                         --------------     --------------      --------------

Meldisco                 $ 1.6     0.7%     $(0.8)   (0.4%)     $(0.8)   (0.4%)
Footaction                 8.1     5.9%       5.0     4.5%        5.0     4.5%
Corporate                 (2.3)   --         --      --          (3.2)   --
                         -----   -----      -----   -----       -----   -----
   Total                 $ 7.4     2.0%     $ 4.2     1.2%      $ 1.0     0.3%
                         =====   =====      =====   =====       =====   =====

Operating profit for the first quarter ended March 29, 1997 increased 76.2% over
the historical first quarter of 1996. On a pro forma basis, operating profit
increased $6.4 million in 1997 over the $1.0 million on a pro forma basis for
1996. This improvement can be attributed to the Company's increased sales and
the ability to leverage fixed costs.

Liquidity and Financial Condition

At March 29, 1997, the Company's cash balance was $62.9 million. This included
$28.3 million in short-term investments with maturities less than three months.
Current assets, excluding the Melville intercompany receivable, were higher at
March 29, 1997 as compared to March 30, 1996 due to the increased cash and
accounts receivable balances. Inventories declined as the result of the
discontinuance and closing of Thom McAn stores in 1996. The increase in current
liabilities for the first quarter of 1997 compared to the first quarter of 1996
was due to the increase in income taxes payable and improved working capital
management offset in part by the reduction in the Thom McAn reserve.

The Company's businesses are seasonal in nature. Peak selling periods coincide
with Christmas, the Easter holiday and the back-to-school selling seasons.
Working capital requirements vary with seasonal business volume and inventory
buildups occurring prior to the peak periods. The Company expects that its
current cash, together with cash generated from operations and the $425 million
unsecured revolving credit facility (the "Credit Facility"), will be adequate to
fund


                                       12
<PAGE>

                     FOOTSTAR, INC. AND SUBSIDIARY COMPANIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

its operating expenses, working capital needs, capital expenditures and the cash
needs associated with the discontinuance of Thom McAn. The Company's current
borrowing capacity is sufficient to take advantage of growth and investment
opportunities.

Capital expenditures for the first quarter ended March 29, 1997 were $13.6
million and are in line with the Company's planned expenditures for all of 1997.
These expenditures relate primarily to the opening, remodeling, relocation or
expansion of Footaction stores and the investments in strategic management
information systems.

The Company expects that it will retain all available funds for the operation
and expansion of its business, and does not anticipate paying any cash dividends
to shareholders in the foreseeable future. Under its arrangement with Kmart,
Meldisco will distribute annually to Kmart, a portion of profits representing
Kmart's minority interest in the Meldisco Subsidiaries. In March 1997, the
Company paid $35.9 million in dividends representing Kmart's minority interests
for fiscal year 1996.

As of March 29, 1997 there had been no direct borrowings under the Credit
Facility and $134.2 million in letters of credit were outstanding under the
Credit Facility. The Company's Credit Facility contains various operating
covenants which, among other things, impose certain limitations on the Company's
ability to incur liens, incur indebtedness, merge, consolidate or declare and
make dividend payments. Under the Credit Facility, the Company is required to
comply with financial covenants relating to ratios of cash flow, fixed charge
coverage and leverage.

Effective March 1, 1997, the Company established the Funds Transfer Program
whereby payment for merchandise can be effected by wire transfer of funds rather
than through letters of credit. Participation in the program provides vendors
with the opportunity to reduce bank fees in connection with letters of credit
and streamlines the documentation process.

Forward-Looking Statements

This Report on Form 10-Q contains statements which constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. These statements appear in a number of places in this Report as well as
the documents incorporated by reference and can be identified by the use of
forward-looking terminology such as "believe," "expect," "estimate," "plans,"
"may," "will," "should" or "anticipates" or similar statements or the negative
thereof or other variations thereof. Such forward-looking statements include,
without limitation, statements made as to cost savings, the impact of the
discontinuation of Thom McAn, improvements in infrastructure, distribution and
replenishment systems and operating efficiencies, business strategy, sales and
earnings growth, and expansion plans and projections. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements to be materially
different from any future results, performance or


                                       13
<PAGE>

                     FOOTSTAR, INC. AND SUBSIDIARY COMPANIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

achievements expressed or implied by such forward-looking statements.
Consequently, all of the forward-looking statements made herein are qualified by
these cautionary statements, and there can be no assurance that the actual
results, performance or achievement will be realized. The information contained
in this Report as well as information contained under the caption "Risk Factors"
in the Form 10/A filed by the Company on September 25, 1996 with the Securities
and Exchange Commission, identifies important factors that could cause such
results, performance or achievements not to be realized.


                                       14
<PAGE>

                         REVIEW BY INDEPENDENT AUDITORS

The March 29, 1997 and March 30, 1996 consolidated condensed financial
statements included in this filing on Form 10-Q have been reviewed by KPMG Peat
Marwick LLP, independent auditors in accordance with established professional
standards and procedures for such a limited review.

The report of KPMG Peat Marwick LLP, commenting on their review, is included
herein as Part I - Exhibit 1.


                                       15
<PAGE>

                                                              Part 1 - Exhibit 1

                       Independent Auditors' Review Report

The Board of Directors and Shareholders
Footstar, Inc.

We have reviewed the consolidated condensed balance sheet of Footstar, Inc. and
subsidiary companies as of March 29, 1997 and the related consolidated condensed
statements of operations and cash flows for the three-month periods ended March
29, 1997 and March 30, 1996, respectively. These consolidated condensed
financial statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the consolidated condensed financial statements referred to above for
them to be in conformity with general accepted accounting principles.

We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Footstar, Inc. and subsidiary
companies as of December 28, 1996 and the related consolidated statements of
operations, shareholders' equity, and cash flows for the year then ended (not
presented herein); and in our report dated February 12, 1997, we expressed an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying consolidated condensed balance
sheet as of December 28, 1996, is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.

                                              /S/KPMG Peat Marwick LLP

New York, New York
April 17, 1997


                                       16
<PAGE>

                          Part II. - OTHER INFORMATION

Item 6 - Exhibits and Reports on Form 8-K

     a)   EXHIBIT INDEX

     Exhibit

          11   Earnings Per Share

          15   Accountants' Acknowledgment

          27   Financial Data Schedule

     b)   Reports on Form 8-K - None

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                   FOOTSTAR, INC.
                                   --------------
                                   (REGISTRANT)


                              /S/CARLOS E. ALBERINI
                                 -------------------------
                                 Carlos E. Alberini
                                 Senior Vice President and
                                 Chief Financial Officer

Date: May 12, 1997


                                       17