Genesco is downsizing the store footprint of its teen footwear banner.
The footwear retailer said it plans to shutter more than 100 underperforming Journeys stores in its current fiscal year, up from its previous estimate of 60. The closings are expected to save up to $40 million, higher than the $20 million to $25 million the company previously estimated. (Journeys has approximately 800 stores in the U.S., Canada and Puerto Rico.)
On the company’s earnings call, Genesco CEO Mimi Vaughn has opened 13 off-mall Journeys stores and is encouraged by the early results.
“We still have work to do, but we are so far encouraged by the early reads and believe this initiative will represent a key element in Journeys’ growth moving forward,” Vaughn told investors on call.
Genesco’s net sales fell 7% to $483 million in the quarter ended April 29, driven by a 13% decrease at Journeys. The Journeys Group also reported a 14% drop in comparable.
“Consumer demand at Journeys dropped off significantly early in the quarter and did not improve as we changed seasons in the latter part of March and into April, offsetting another quarter of record sales at Schuh and Johnston & Murphy,” Vaughn said in the earnings statement. “In response, we are taking swift actions to mitigate the consumer shift in the marketplace, including closing more underperforming Journeys stores, reducing our cost base further, and working to quickly refine our product assortment.”
She continued, “As the leading destination for teen fashion footwear, and key partner to our brands, I feel confident that our footwear focused strategy and the strategic initiatives we are implementing will position Journeys to emerge from this period in an even stronger competitive position.”
Looking ahead, Genesco lowered its full fiscal 2024 outlook and now expects sales to be down 4% to 5%, compared to its previous estimates for sales for to come in flat or up 2% versus last year.
Genesco Inc. sells footwear and accessories in more than 1,390 retail stores throughout the U.S., Canada, the United Kingdom and the Republic of Ireland, principally under the names Journeys, Journeys Kidz, Little Burgundy, Schuh, Schuh Kids, Johnston & Murphy, and on internet websites.