After seeing some improvement in its Journeys business in the second quarter, Genesco president, CEO and chair Mimi Vaughn discussed plans for the teen retailer’s future on the company’s Thursday earnings call.
According to Vaughn, the Journeys consumer “remains squeezed” by inflation, opting to conserve spending, making judicious choices on what to buy and primarily shopping when there’s a need or a wanted item to purchase. Meanwhile, the CEO added that competitive discounting, most pronounced in athletic footwear continues to compete for share of wallet and suppressed demand for other products.
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These headwinds resulted in the Nashville-based footwear company seeing net sales in the second quarter of $523 million, a decrease of 2 percent from $535 million in the same period last year.
Genesco noted that the overall sales decline was driven by a decrease of 11 percent at Journeys and a 7 percent decrease at Genesco Brands, partially offset by a 14 percent increase in e-commerce comparable sales.
“On a positive note, our consumers’ appetite for product newness remains strong, and we and our brand partners are moving quickly to inject the Journeys assortment with more of these in-demand goods,” Vaughn told analysts.
This expected injection of product newness is part of Genesco’s plan to “effectively elevate” Journeys performance moving forward while also accelerating several initiatives already in place.
“The plan is a multipronged strategy to drive traffic, sales and profitability with the goal of delivering not only stronger near-term improvement, but also further cementing Journeys’ positioning as the dominant player in teen fashion footwear over the longer term,” Vaughn noted.
The main element includes strengthening customer engagement and expanding relationships with Journeys’ target teen customer, which Vaughn said is key in challenging times and is the company’s first priority. The CEO added that Genesco has launched a “deep dive” on consumer and market insights in order to “better understand” teen purchase intent and behavior in our post-pandemic world.
As part of driving customer engagement, Journeys launched a new loyalty program in hopes to interact with customers more frequently, drive repeat purchases, and induce them to consolidate their branded purchases to achieve higher loyalty tiers. The company expects to expand the program further in the third quarter.
Another element of the plan includes elevating product and strengthening brand relationships, including expanding and adding more differentiation to the assortment, increasing the number of exclusives for Journeys and testing new brands and styles.
“Here, we’re aggressively working to reposition the Journeys product assortment to meet the customers’ appetite for newness,” Vaughn said. “But beyond product, we’re more fully leveraging the partnerships with our brands. Collaborating to tell key stories through social media, events and other activations to strengthen both the Journeys brand and the brands of our vendors.”
The strategy also includes sharpening Journeys brand marketing, implementing incremental initiatives to drive digital and omnichannel growth through programs like buy online pick up in store, and optimizing its store footprint while driving e-commerce and piloting off-mall locations.
“Importantly, I want to underscore, again, the conviction I have in our ability to address Journeys’ challenges and achieve success just as we have demonstrated with our other businesses,” Vaughn added.
These plans come after the company announced in May that it would close more than 100 Journeys stores and reduce costs by $40 million in fiscal 2024. At the end of the year, Genesco expects to have 1,057 Journeys stores.
This news also comes one day after it announced longtime Journeys executive Mario Gallione would retire next year.
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