Boots and hats are Genesco's deal. It sells casual and dress footwear, headwear, and sports apparel through more than 2,820 shoe and cap stores in the US, Canada, Puerto Rico, the UK, and Ireland. Genesco's shoe operations include Journeys, upscale Johnston & Murphy, Schuh, and Licensed Brands (Levi Strauss' Dockers footwear, Keuka). Its fast-growing Lids Sports division operates the Lids Locker Room and Lids Clubhouse retail chain and website. Founded in 1924 as a shoe retailer, Genesco has diversified by adding hats and sports apparel and selling merchandise online. It expanded overseas with the purchase of Scotland's Shuh.
Genesco is a leading footwear and accessories retailer and wholesaler that operates through five business segments. Journeys Group, the largest business at around 41% of sales, operates the teen-focused shoe chains, catalog, and online business Journeys, Journeys Kidz, and Shi by Journeys; Lids Sports Group (32% of sales) sells headwear and accessories under the Lids and other banners at mall-based stores, airports and kiosks throughout North America and Puerto Rico; Schuh (some 14% of sales), a leading fashion footwear chain based in Scotland with more than 100 stores in England and Ireland; the Johnston & Murphy Group, which operates some 170 Johnston & Murphy upscale shoe stores, a catalog and online division, and wholesale distribution business; and lastly Licensed Brands, which comprises comprised primarily of Dockers Footwear licensed from Levi Strauss.
The company operates some 2,852 stores, most of which are in the US. Journeys Group operates 1,222 stores, Lids Sports Group 1,332, Johnston & Murphy 173, and Schuh 125.
Nashville-based Genesco operates throughout the US, Canada, and Puerto Rico, and the UK, Ireland, and Germany. The company sources its footwear and accessories from manufacturers in about 20 countries, including Bangladesh, Brazil, China, Mexico, and Vietnam. While Genesco doesn't report international sales, its UK-based Schuh business brings in around 14% of Genesco's net sales.
Sales and Marketing
The footwear and apparel company distributes its products through company-owned retail stores, online, and by catalog. It also supplies wholesalers. Genesco reported advertising costs of $73.7 million in fiscal 2016 (ended January), up from $67.0 million the prior year.
The company also designs, sources, markets and distributes footwear under its own Johnston & Murphy brand (Trask), the licensed Dockers brand and other brands that the Genesco licenses for men's footwear to more than 1,200 retail accounts in the US, including a number of leading department, discount, and specialty stores.
Net sales of the company have been on the rise since 2011.
In fiscal 2016 (ended January), revenue grew 6% on prior year to $3.0 billion as a result of strong performance in Lids Sports Group, Journeys Group, and Johnston & Murphy Group. Journeys Group and Lids Sports Group recorded higher comparable sales as a result of higher unit prices (unit sales were flat), as well as an increase in net store numbers. Johnston & Murphy Group saw 6% higher unit sales, but unit prices were flat.
Net income fell 3% in fiscal 2016 to $94.6 million, due to an increase in asset impairments. Cash flow from operating activities also fell, by 24% to $145.1 million, as a result of the decrease in net income and changes in other accrued liabilities.
Genesco's long-term strategy is to grow organically through the addition of new stores and through acquisitions. Overall, Genesco has added over 500 stores over the past five years. Journey Group added 40 net stores in fiscal 2016, which includes 36 Little Burgundy, and plans to open a further 63 net stores in fiscal 2017. Going forward, the company plans to add 130 new retail stores in fiscal 2017, while closing 56.
In 2016, Genesco acquired Little Burgundy, a small Canadian footwear chain with 37 stores for $35.1 million from the Aldo Group. The acquisition will expand Genesco's presence in the Canadian market.
In Q4 2016, the company sold off the Lids Team Sports division of Lids Sports Group to BSN Sports for a sum of $4.7 million. The acquisition allows Genesco to focus more on its core operations.
In 2015 G-III Apparel Group and Genesco entered into a wholesale license agreement for Genesco to design, distribute, and market G.H. Bass men’s and women’s footwear in the US and Canada.
Mergers and Acquisitions
In 2016, Genesco acquired Little Burgundy, a small Canadian footwear chain with 37 stores for $35.1 million from the Aldo Group.
During fiscal 2015 the company completed acquisitions of small retail chains and one small wholesale business for $34.9 million. In fiscal 2014 and 2013 Genesco completed other acquisitions of primarily small retail chains for $13.6 million and $23.8 million, respectively. The stores and wholesale business acquired are operated within the Lids Sports Group.