NASHVILLE, Tenn., June 23, 2021 /PRNewswire/ -- Genesco Inc. (NYSE:
GCO) ("Genesco" or the "Company") today filed an investor
presentation with the Securities and Exchange Commission detailing
the Company's proven track record of execution, strong footwear
focused strategy, and fit for purpose Board of Directors.
Genesco urges shareholders to protect the value of their
investment by voting the BLUE proxy card today "FOR" all nine of
the Company's highly qualified directors in connection with
Genesco's Annual Meeting of Shareholders scheduled to be held on
July 20, 2021. Shareholders of record
as of the close of business on June 28,
2021 will be entitled to vote at the meeting. The
presentation and additional information can be found at
www.GenescoDrivingValue.com/investor-presentation.
Highlights from the presentation include:
Genesco's Compelling Execution, Including During the
Pandemic
- During the pandemic, Genesco delivered strong performance,
including record digital revenues, reduced operating expenses,
increased liquidity, and significant sequential quarterly
improvement in revenue and profit margins with increased cash flow
in FY2021 vs. FY2020.
- Genesco's footwear focused strategy delivered strong results
pre-pandemic and the Company delivered 11 consecutive quarters of
total comparable sales growth between Q2 FY2018 and Q4 FY2020.
- Genesco is off to a strong start in FY2022, recently reporting
an increase in revenue of 9% and an increase in adjusted operating
income of 125% in Q1 FY2022 over the pre-pandemic period of Q1
FY2020 (+71% growth in GAAP OI vs. Q1 FY2020)1.
The Company's Strategy and Thoughtful Allocation of Capital
Position Genesco to Continue Creating Greater Value
- Genesco's footwear focused strategy has provided a strong
platform for growth and capital efficiency, and the Company is on
track to deliver adjusted operating margin of 6% or more by
FY2025.
- This strategy enables Genesco to leverage synergies across its
platforms to enhance scale and profitability.
- Genesco's business is anchored upon a robust,
direct-to-consumer model, which is driven by leading retail brands
and a growing digital platform.
- The Board and management's prudent capital allocation focuses
on reinvestment in the business, returning excess capital to
shareholders, and maintaining balance sheet flexibility.
Genesco Has Assembled the Right Board and Management Team for
Continued Success
- Genesco's Board is fresh, independent, and diverse, and each
Director brings highly relevant skills and experiences that are
essential to its footwear focused strategy and to delivering
long-term, sustainable shareholder value.
- The Board decisively oversaw and implemented a strategic
transformation to address changes in retail, the increasing
importance of digital and resultant need for scale and system
efficiencies, and has made deliberate changes to support near- and
long-term value creation.
- Under Lead Independent Director Matthew
Diamond's leadership, the Board appointed Mimi Vaughn as President and CEO in February 2020 and Board Chair in July 2020 to help drive strategy execution and
brought in additional key management team members aligned with
Genesco's footwear focused strategy.
- Genesco has added five new directors (representing a majority
of the Board) since 2019 with specific skillsets required to
oversee the footwear focused strategy, and four directors left the
Board over that same period, resulting in an average director
tenure of less than five years.
- The Compensation Committee of the Board executed a thoughtful,
performance-aligned executive compensation program designed to
directly incentivize shareholder value creation, of which
Say-on-Pay advisory vote garnered an average of 95% shareholder
support over the past five years.
- The Company recently formed an ESG subcommittee under the
Nominating and Governance Committee to provide oversight of its
environmental, health and safety, diversity, equity and inclusion,
corporate social responsibility, and corporate governance and
sustainability initiatives.
Genesco Believes Legion's Baseless Campaign and
Underqualified Nominees Would Introduce Significant Risk for
Shareholders
- Genesco has taken every possible action to engage with Legion
constructively, but at every turn Legion has refused to collaborate
or share any business plans, strategic ideas, or how their nominees
support a compelling vision for Genesco's future.
- Legion has demonstrated a fundamental lack of understanding of
Genesco's business and of the skills and expertise necessary for
Genesco's Board.
- Legion's nominees are underqualified and lack the principal
footwear, public company CEO or CFO, substantial eCommerce, or
public board experience to serve on Genesco's Board.
- Despite Genesco's majority-refreshed Board, Legion's campaign
would result in 100% of the Board's independent directors turning
over in less than a nine-month period. Consequently, the Board
would have an average board tenure of only four months.
- Legion has not demonstrated that it is a long-term shareholder;
during its 2018 campaign, Legion began selling its position after
only four months and completely exited less than 16 months after
settling for board seats.
Genesco strongly urges shareholders to vote the BLUE proxy
card FOR ALL the Company's highly qualified and experienced
director nominees. Shareholders are reminded that their vote is
important, no matter how many or how few shares they own. Voting
the WHITE proxy card, even in protest, will revoke any previous
proxy submitted using the BLUE proxy card. Only the
latest-dated proxy counts.
If shareholders have any questions or need help voting their
BLUE proxy card, please contact:
Innisfree
1 (877) 825-8772
(toll-free from the U.S. and Canada)
+1 (412) 232-3651
(from other locations)
About Genesco Inc.
Genesco Inc., a Nashville-based
specialty retailer and branded company, sells footwear and
accessories in more than 1,455 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 www.journeys.com,
www.journeyskidz.com, www.journeys.ca, www.littleburgundyshoes.com,
www.schuh.co.uk, www.johnstonmurphy.com, www.johnstonmurphy.ca,
www.nashvilleshoewarehouse.com, and www.dockersshoes.com. In
addition, Genesco sells footwear at wholesale under its Johnston
& Murphy brand, the licensed Levi's brand, the licensed Dockers
brand, the licensed Bass brand, and other brands. For more
information on Genesco and its operating divisions, please visit
www.genesco.com.
Forward-Looking Statements
This release contains forward-looking statements, including those
regarding the performance outlook for the Company and all other
statements not addressing solely historical facts or present
conditions. Forward- looking statements are usually identified by
or are associated with such words as "intend," "expect," "believe,"
"should," "anticipate," "optimistic," "on track" and similar
terminology. Actual results could vary materially from the
expectations reflected in these statements. A number of factors
could cause differences. These include adjustments to projections
reflected in forward-looking statements, including those resulting
from the effects of COVID-19 on the Company's business, including
COVID-19 case spikes in locations in which the Company operates,
the roll-out of COVID-19 vaccines and the public's acceptance of
the vaccines, additional stores closures due to COVID-19, the
timing of the re-opening of our stores, the timing of in-person
back-to-work and back-to-school and sales with respect thereto,
weakness in store and shopping mall traffic, restrictions on
operations imposed by government entities and/or landlords, changes
in public safety and health requirements, and limitations on the
Company's ability to adequately staff and operate stores.
Differences from expectations could also result from stores
closures and effects on the business as a result of civil
disturbances; the level and timing of promotional activity
necessary to maintain inventories at appropriate levels; the
imposition of tariffs on product imported by the Company or its
vendors as well as the ability and costs to move production of
products in response to tariffs; the Company's ability to obtain
from suppliers products that are in-demand on a timely basis and
effectively manage disruptions in product supply or distribution,
including disruptions as a result of COVID-19; unfavorable trends
in fuel costs, foreign exchange rates, foreign labor and material
costs, and other factors affecting the cost of products; the
effects of the British decision to exit the European Union and
other sources of market weakness in the U.K. and Republic of Ireland; the effectiveness of the
Company's omni-channel initiatives; costs associated with changes
in minimum wage and overtime requirements; wage pressure in the
U.S. and the U.K.; weakness in the consumer economy and retail
industry; competition and fashion trends in the Company's markets;
risks related to the potential for terrorist events; risks related
to public health and safety events; changes in buying patterns by
significant wholesale customers; retained liabilities associated
with divestitures of businesses including potential liabilities
under leases as the prior tenant or as a guarantor; and changes in
the timing of holidays or in the onset of seasonal weather
affecting period-to-period sales comparisons. Additional factors
that could cause differences from expectations include the ability
to renew leases in existing stores and control or lower occupancy
costs, and to conduct required remodeling or refurbishment on
schedule and at expected expense levels; the Company's ability to
realize anticipated cost savings, including rent savings; the
Company's ability to achieve expected digital gains and gain market
share; deterioration in the performance of individual businesses or
of the Company's market value relative to its book value, resulting
in impairments of fixed assets, operating lease right of use assets
or intangible assets or other adverse financial consequences and
the timing and amount of such impairments or other consequences;
unexpected changes to the market for the Company's shares or for
the retail sector in general; costs and reputational harm as a
result of disruptions in the Company's business or information
technology systems either by security breaches and incidents or by
potential problems associated with the implementation of new or
upgraded systems; the Company's ability to realize any anticipated
tax benefits; and the cost and outcome of litigation,
investigations and environmental matters involving the Company, and
the impact of actions initiated by activist shareholders.
Additional factors are cited in the "Risk Factors," "Legal
Proceedings" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" sections of, and elsewhere in,
the Company's 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 the Company's website, www.genesco.com.
Many of the factors that will determine the outcome of the subject
matter of this release are beyond Genesco's 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.
Important Additional Information and Where to Find It
Genesco has filed a definitive proxy statement (the "Proxy
Statement") and accompanying proxy card in connection with the
solicitation of proxies for the 2021 annual meeting of Genesco
shareholders (the "Annual Meeting"). INVESTORS AND
SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ THE PROXY STATEMENT
AND ACCOMPANYING PROXY CARD AND OTHER DOCUMENTS FILED WITH THE U.S.
Securities and Exchange Commission (the "SEC") CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN
IMPORTANT INFORMATION. Shareholders may obtain the Proxy
Statement, any amendments or supplements to the Proxy Statement and
other documents filed by Genesco with the SEC for no charge at the
SEC's website at www.sec.gov. Copies will also be available
at no charge in the Investors section of Genesco's corporate
website at www.genesco.com.
Participants in the Solicitation
Genesco, its directors and certain of its executive officers may be
deemed to be participants in the solicitation of proxies from
Genesco shareholders in connection with the matters to be
considered at the Annual Meeting. Information regarding the names
of Genesco's directors and executive officers and certain other
individuals and their respective interests in Genesco by security
holdings or otherwise is set forth in the Annual Report on Form
10-K of Genesco for the fiscal year ended January 30, 2021, and in the Proxy Statement. To
the extent holdings of such participants in Genesco's securities
have changed since the amounts described in the Proxy Statement,
such changes have been reflected on Initial Statements of
Beneficial Ownership on Form 3 or Statements of Change in Ownership
on Form 4 filed with the SEC.
1Adjusted operating income excludes fees related to
the shareholder activist, retail store asset impairments and
expenses related to the new headquarters building, net of tax
effect in the first quarter of Fiscal 2022 (the "Excluded Items").
A reconciliation of operating income in accordance with U.S.
Generally Accepted Accounting Principles and adjusted operating
income is set forth below.
Adjusted Operating
Income (Loss) by Segment
|
|
|
|
May 1,
2021
|
|
May 4,
2019
|
|
|
Operating
|
Asset
Impair
|
Adj
Operating
|
|
Operating
|
Asset
Impair
|
Adj
Operating
|
In
Thousands
|
|
Income
(Loss)
|
& Other
Adj
|
Income
(Loss)
|
|
Income
(Loss)
|
& Other
Adj
|
Income
(Loss)
|
Journeys
Group
|
|
$
33,124
|
$
-
|
$
33,124
|
|
$
18,976
|
$
-
|
$
18,976
|
Schuh
Group
|
|
(3,847)
|
-
|
(3,847)
|
|
(5,428)
|
-
|
(5,428)
|
Johnston & Murphy
Group
|
|
(3,180)
|
-
|
(3,180)
|
|
5,106
|
-
|
5,106
|
Licensed
Brands
|
|
2,561
|
-
|
2,561
|
|
429
|
-
|
429
|
Goodwill
Impairment
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
Corporate and
Other
|
|
(13,131)
|
3,267
|
(9,864)
|
|
(9,999)
|
(731)
|
(10,730)
|
Total Operating
Income
|
|
$
15,527
|
$
3,267
|
$
18,794
|
|
$
9,084
|
$
(731)
|
$
8,353
|
% of
sales
|
|
2.9%
|
|
3.5%
|
|
1.8%
|
|
1.7%
|
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SOURCE Genesco Inc.