ATLANTA-Athlete's Foot of suburban Kennesaw will be closing and selling its inventory and leases at 124 company-owned and operated stores in 25 states totaling an estimated 2.5 million sf of retail space over the next three months, according to the sports shoe retailer's Chapter 11 petition filed in US Bankruptcy Court here.

However, 593 independent franchise Athlete's Foot stores, totaling an estimated 11.9 million sf of leased space, will stay open, the company says. Despite a $20-million loan from GMAC Commercial Finance LLC, the retailer ran into inventory and stocking problems that triggered the Chapter filing, the company says. A total 1,047 workers will lose their jobs when the stores close.

The retailer owes GMAC, its only secured debtor, $14 million, according to the filing. Unsecured creditors New Balance and K Swiss have filed individual claims for $1.4 million. Athlete's Foot's annual gross sales average $500 million but in the filing, the company lists total assets of $33.6 million and total debt of $39.4 million.

The retailer oversees franchised operations in 45 countries. Robert J. Corliss is president and CEO of Athlete's Foot. Corliss headed a management group last year that bought the firm from Group Rallye SA, a retail conglomerate based in France. Group Rallye bought 33-year-old Athlete's Foot in 1984.