Nashville–Genesco Inc. today announced that it has acquired Schuh Group Ltd., a specialty retailer of casual and athletic footwear based in the United Kingdom, in a deal worth up to 150 million pounds (about $239.9 million).
Schuh operates 59 stores in the United Kingdom and Ireland, 16 concessions in Republic apparel stores and one of the U.K.’s largest online shoe websites, www.schuh.co.uk. The company’s 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. generated sales of about 164 million pounds for its fiscal year ended March 27.
A Foothold in the UK
“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,” said Robert J. Dennis, Genesco’s chairman, president and ceo. “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.”
Under terms of the deal, Genesco, which operates Journeys and Lids Sports Group, paid 100 million pounds up front and will pay up to 25 million pounds in milestone payments and another 25 million pounds in management bonuses in 2015 for reaching performance-related targets. Genesco also benefits from 29.5 million pounds remaining under Schuh’s credit facilities. For its fiscal year ended March 27, Schuh generated sales of about 164 million pounds.
Genesco reported in May that its first quarter profit surged 72% as its two largest segments posted double-digit sales growth. The performance easily topped Wall Street estimates leading it to raise its full year guidance.
Q2 Comparable Store Sales Up 14%
Genesco also said today that comparable store sales for its retail stores (other than Schuh) had increased 14% in the second quarter to date through June 18, 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 added.