The war of words between Genesco and activist investor Legion Partners Asset Management ahead of a proxy vote shows no signs of a truce anytime soon.
The parent company of Journeys, Johnston & Murphy and other footwear brands has been under attack from Legion, which is calling for a top-to-bottom shakeup at Genesco and remaking the company's board. On Thursday, the retailer released a statement in which it defended its ongoing strategy and said that Legion "fundamentally misunderstands the dynamics of today's footwear retail and branded market and implications for Genesco."
In its statement, Genesco said that Legion also demonstrates a “stark lack of understanding of the “retail brick-and-mortar opportunity with suggestions that run counter to the creation of shareholder value.” The retailer said that Journeys is looking to optimize its current store footprint and that Legion's proposed plan that “Journeys should expand further into several hundred malls and expand by hundreds of stores at a time when digital penetration is accelerating is completely at odds with the current market environment.”
On a similar note, Legion's suggestion to open 200-plus additional Johnston & Murphy stores relies on a “dated view of the retail store base opportunity given the rise of e-commerce,” Genesco added.
Legion responded to Genesco with a statement in which reinforced the need for additional board change at the company following its "latest attempt to distract and mislead shareholders."
Additionally, Legion said it tried to engage with Genesco in good faith prior to publicly announcing its nominees – contrary to GCO’s claims – and made several settlement attempts for just one designee, but the company refused to have twenty-year director Matthew C. Diamond step down from the board in n 2022. Full text of the press release is included below.
To read the statement from Legion, click here https://www.businesswire.com/news/home/20210630005978/en/Legion-Partners’-Four-Highly-Qualified-Director-Candidates-Issue-Letter-to-Genesco-Shareholders
Genesco operates 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.