F.W. WOOLWORTH'S <Z> 1986 PROFITS RISE 21 PCT The specialty retailing area continues to pay off for F.W. Woolworth Co, once known only as a five and dime store chain, which said its 1986 income rose 21 pct. It was the fourth consecutive year of profit increases for the New York-based retailer which was founded over 100 years ago. Woolworth's 1986 income rose to 214 mln dlrs or 3.25 dlrs per share compared with 1985's profit of 177 mln or 2.75 dlrs per share. Revenues for the year rose to 6.50 billion compared with the prior year's 5.96 billion. For the fourth quarter, the company reported profits rose 10 pct to 117 mln dlrs or 1.78 dlrs per share compared with 1985 fourth quarter results of 106 mln or 1.64 dlrs per share. Revenues rose to 2.02 billion from 1.85 billion dlrs. Roy Garofalo, Woolworth vice president, told Reuters that income generated by the company's specialty store operations accounted for 52 pct of the parent company's 1986 profits. He said the company now has 4,700 specialty stores operating under 30 different names. Woolworth plans to open 650 more specialty stores in 1987. At this time last year, it operated 4,100 specialty stores, Garofalo said. Garofalo said the largest specialty chain operated by Woolworth is Kinney Shoe Stores, followed by the Richman apparel unit. Among other units are Little Folk Shop, a chain of discount children's apparel stores; The Rx Place, a discount drug, health and beauty aid operation; and Face Fantasies, which sells cosmetics. There are currently about 1,700 Woolworth general merchandise stores operating worldwide, of which 1,200 are in the United States. Harold Sells, chairman and chief executive of Woolworth, said in a statement, "These results are especially gratifying as they are an improvement over last year's record earnings." Sells that it was the fourth successive year earnings in each quarter improved over the corresponding year-earlier period. Woolworth's variety store operations were hard hit in the 1970's and early 1980's by the quickly growing discount store industry. In an attempt to compete in the 1970's, Woolworth opened a discount general store chain, Woolco, and J. Brannam, a discount apparel chain. Both were failures in the United States, although Woolco still operates in Canada. In 1985, however, Woolworth changed its strategy and announced that it would operate specialty stores. At that time, the company said it would create 14 new groups of such stores. Specialty stores generally have higher sales per square foot than general merchandise stores.