Genesco to Close 100+ Journeys Stores as it Focuses on Off-Mall Locations

Genesco expects to close more than 100 Journeys stores in fiscal 2024, more than its prior expectation of closing 60 stores, after the shoe retailer posted extremely poor results for Q1 2024, which ended April 29, 2023. The company is looking to pivot Journeys to an off-mall strategy, with 13 locations out of a planned 25 already open.

Comparable sales at Journeys plummeted 14%, dragging the company’s overall comparable sales down 5% despite positive results from the Schuh and Johnston & Murphy banners. Genesco’s gross margin was 47.3% in Q1 2024, compared to 48.3% in Q1 2023. This was attributed to increased markdowns at Journeys offsetting an otherwise normalized promotional environment, which led to improved margins at the other businesses.

“Following a positive end to the holiday season, the first quarter proved considerably more challenging than we anticipated,” said Mimi Vaughn, Board Chair, President and CEO at Genesco in a statement. “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. 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.”

News from Genesco’s other banners was more positive: Johnston & Murphy comparable sales jumped 18%, while Schuh sales were up 13%. Inventories increased 17% year-over-year at these banners, but the increase was attributed to fueling rapid growth.

However, Journeys still accounted for 56.3% of Genesco’s $483.3 million in sales for Q1 2024, tying the overall company’s fortunes to the ailing shoe retailer. Genesco expects overall sales to be down 4% to 5% for fiscal 2024 as a whole, but the company remains positive about the future as it opens more off-mall stores. These sites enable larger footprints, can carry the full assortment of kids and adult products and have a “significantly lower rent expense,” according to Vaughn.

“We consider off-mall to be more of those power centers and locations that are anchored by a different mix of tenants,” said Vaughn on a call with investors. “This is really a newer initiative for us. We, in our market research with our consumers, have gotten the feedback that our customers go to off-mall locations multiple times per month, and it’s part of the places that they go. They enjoy the convenience of shopping closer to home, combined with some of the omnichannel services that we can offer like curbside pickup. And so we have had success with a number of early off-mall locations, and that encouraged us to test more.”