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8-K - FORM 8-K - GENESCO INC | g27584e8vk.htm |
EX-2.1 - EX-2.1 - GENESCO INC | g27584exv2w1.htm |
EX-2.2 - EX-2.2 - GENESCO INC | g27584exv2w2.htm |
EX-10.1 - EX-10.1 - GENESCO INC | g27584exv10w1.htm |
EX-10.2 - EX-10.2 - GENESCO INC | g27584exv10w2.htm |
Exhibit 99.1
Financial Contact: | James S. Gulmi (615) 367-8325 | |
Media Contact: | Claire S. McCall (615) 367-8283 |
GENESCO ACQUIRES SCHUH
Schuh Currently Operates 59 Stores and 16 Concessions
in the U.K. and Republic of Ireland
Conference Call Scheduled for Thursday, June 23, 2011 at 8:30 am ET
Schuh Currently Operates 59 Stores and 16 Concessions
in the U.K. and Republic of Ireland
Conference Call Scheduled for Thursday, June 23, 2011 at 8:30 am ET
NASHVILLE, Tenn., June 23, 2011 Genesco Inc. (NYSE: GCO) today announced that it has acquired
Schuh Group Ltd., a specialty retailer of casual and athletic footwear based in the United Kingdom.
The purchase price paid at closing was £100 million, subject to closing adjustments, less £29.5
million outstanding under existing Schuh credit facilities, which remain in place. The purchase
agreement also provides for deferred purchase price payments totaling £25 million, payable £15
million and £10 million on the third and fourth anniversaries of the closing, respectively, subject
to the payees not having terminated their employment with Schuh under certain specified
circumstances. Genesco has also agreed to implement a bonus plan for certain members of Schuh
management which will pay a total of up to £25 million in cash bonuses in 2015 subject to the Schuh
business having achieved specified performance targets.
Genesco funded the initial payment and associated expenses with borrowings under an existing
U.S. credit facility of $89 million and the balance from cash on hand. Genesco expects the
acquisition will be accretive to earnings per share in its current fiscal year, excluding any
merger and integration expenses and compensation expense attributable to the deferred purchase
price payments because they are contingent upon the continued employment of the payees.
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GENESCO ACQUIRES SCHUH Add One
Headquartered in Scotland, Schuh operates 59 stores in the United Kingdom and Republic of
Ireland, 16 concessions in Republic apparel stores and one of the U.K.s largest online shoe
websites, www.schuh.co.uk. The companys core product selection consists of a broad range of
branded casual and athletic footwear complemented by a meaningful private label offering targeted
at its 15- to 24- year old core customer. For the fiscal year ended March 27, 2011, Schuh
generated net sales of approximately £164 million with an operating margin above 9% adjusted for
goodwill amortization.
Robert J. Dennis, chairman, president and chief executive officer of Genesco, said, Schuh
provides us with an immediate and established retail presence in the United Kingdom, a highly
experienced international management team, and improved insight into global fashion trends. The
concept is similar to Journeys in customer demographics, product offering and operating philosophy,
so it is a business we know and understand. At the same time, we believe that the combined
businesses will benefit from significant merchandising synergies and from many opportunities to
share best practices to our mutual benefit. Financially, the Schuh business is compelling, with
attractive store economics and solid growth prospects.
Managing Director of Schuh Colin Temple and Finance Director Mark Crutchley will continue in
their current leadership of the Schuh management team, which includes seven division heads
overseeing store operations, buying, IT, human resources, ecommerce, merchandising, and logistics.
Colin Temple commented, Schuh has gained market share in recent years due to a strong product
assortment and a growing store base. Like Journeys, we specialize in providing our customers with
branded casual and athletic footwear styles that are in line with current fashion trends and with a
breadth and depth of assortment that is difficult to find elsewhere. We are excited to join the
Genesco family and believe the combination of our talented organizations will help to further
distinguish our concepts from the competition and accelerate our future growth plans.
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GENESCO ACQUIRES SCHUH Add Two
Genesco was advised in the transaction by Jefferies & Company and Schuh was advised by Noble
Grossart Limited.
Second Quarter Same Store Sales
Genesco also said that same store sales for its retail stores other than Schuh had increased
14% in the second quarter to date through June 18, 2011, with the Journeys Group up 15%, the Lids
Sports Group up 10%, the Johnston & Murphy Group up 20% and the Underground Station Group up 9%.
We are pleased with the strength of our U.S. based businesses and look forward to presenting
an updated outlook for the balance of the year, including Schuh, when we announce our second
quarter results in August, Dennis concluded.
Conference Call
Genesco will host a conference call today, Thursday June 23, 2011, at 8:30 am (Eastern Time)
to discuss the acquisition. The live webcast may be accessed at (719) 325-2363 or through the
Companys internet website, www.genesco.com. The call will refer to a slide presentation available
at www.genesco.com under the investor relations section. To listen live, please go to the website
at least 15 minutes early to register, download and install any necessary software.
Cautionary Note Concerning Forward-Looking Statements
This release contains forward-looking statements, including those regarding expectations with
respect to the acquisitions effect on the Companys performance and financial results, and all
other statements not addressing solely historical facts or present conditions. Actual results could
vary materially from the expectations reflected in these statements. A number of factors could
cause differences. These factors include the Companys ability to integrate Schuhs operations as
planned and realize expected
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GENESCO ACQUIRES SCHUH Add Three
efficiencies in Schuhs business, Schuhs ability to recognize same stores sales increases as
projected and its ability to open new stores on its projected schedule and at acceptable expense
levels. In addition, the actual cost to the Company of the deferred participation and management
bonus payments will depend on foreign exchange rates at the time the payments are made. Other
factors that could change expected outcomes include all those affecting the Companys or its
subsidiaries business and financial condition generally, including weakness in the consumer
economy, inability of customers to obtain credit, fashion trends that affect the sales or product
margins of the Companys retail product offerings, changes in buying patterns by significant
wholesale customers, bankruptcies or deterioration in financial condition of significant wholesale
customers, disruptions in product supply or distribution, unfavorable trends in fuel costs, foreign
exchange rates, foreign labor and materials costs, and other factors affecting the cost of
products, competition in the Companys markets and changes in the timing of holidays or in the
onset of seasonal weather affecting period-to-period sales comparisons. Additional factors that
could affect the Companys prospects and cause differences from expectations include the ability to
build, open, staff and support additional retail stores and to renew leases in existing stores and
to conduct required remodeling or refurbishment on schedule and at expected expense levels,
deterioration in the performance of individual businesses or of the Companys market value relative
to its book value, resulting in impairments of fixed assets or intangible assets or other adverse
financial consequences, unexpected changes to the market for its shares, variations from expected
pension-related charges caused by conditions in the financial markets, and the outcome of
litigation, investigations and environmental matters involving the Company. Additional factors are
cited in the Risk Factors, Legal Proceedings and Managements Discussion and Analysis of
Financial Condition and Results of Operations sections of, and elsewhere, in our SEC filings,
copies of which may be obtained from the SEC website, www.sec.gov, or by contacting the investor
relations department of Genesco via our website, www.genesco.com. Many of the factors that will
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GENESCO ACQUIRES SCHUH Add Four
determine the outcome of the subject matter of this release are beyond Genescos ability to control
or predict. Genesco undertakes no obligation to release publicly the results of any revisions to
these forward-looking statements that may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events. Forward-looking statements reflect the
expectations of the Company at the time they are made. The Company disclaims any obligation to
update such statements.
About Genesco Inc.
Genesco Inc., a Nashville-based specialty retailer, sells footwear, headwear, sports apparel
and accessories in more than 2,285 retail stores throughout the U.S. and Canada, principally under
the names Journeys, Journeys Kidz, Shi by Journeys, Lids and Lids Locker Room, Johnston & Murphy,
and Underground Station, and on internet websites www.journeys.com,
www.journeyskidz.com, www.shibyjourneys.com, www.undergroundstation.com,
www.johnstonmurphy.com, www.dockersshoes.com, and www.lids.com. The
Companys Lids Sports Group operates the Lids headwear stores and the lids.com website, the Lids
Locker Room and other team sports fan shops and single team clubhouse stores, and the Lids Team
Sports team dealer business. In addition, Genesco sells wholesale footwear under its Johnston &
Murphy brand, the licensed Dockers brand and other brands. For more information on Genesco and its
operating divisions, please visit www.genesco.com.
About Schuh
Schuh Group Ltd., based in Livingston, Scotland, is the U.K.s leading fashion footwear
retailer, operating from 75 stores across the U.K. and Ireland and online at www.schuh.co.uk.
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