T h e B u s i n e s s o f G e n e s c o
Founded in 1924, Nashville, Tennessee-based Genesco Inc. (NYSE: GCO) is a leading retailer of branded footwear,
of licensed and branded headwear, of licensed sports apparel and accessories and wholesaler of branded footwear.
It operates more than 2,275 footwear, headwear and sports apparel and accessory retail stores in the United States,
Puerto Rico and Canada, principally under the names Journeys,® Journeys Kidz,® Shi by Journeys,™ Johnston & Murphy,®
Underground Station,® Hat World,® Lids,® Hat Shack,® Hat Zone,® Head Quarters, Cap Connection,™ Lids Locker Room and
Sports Fan-Attic.® Genesco also designs, sources, markets and distributes footwear under its own Johnston & Murphy
brand and under the licensed Dockers® brand. Genesco relies on independent third party manufacturers for production
of its footwear products sold at wholesale.
Table of Contents
Business of Genesco ......................................................................................................... 1
Financial Highlights ........................................................................................................... 2
Securities Information ........................................................................................................ 2
Total Return to Shareholders ............................................................................................. 3
Shareholders’ Message .................................................................................................... 4
Brand Profiles .................................................................................................................... 6
Management’s Discussion and Analysis of Financial
Condition and Results of Operations ............................................................................ 20
Financial Summary ......................................................................................................... 39
Management’s Responsibility for Financial Statements .................................................... 40
Report of Independent Registered Public Accounting Firm ............................................... 41
Report of Independent Registered Public Accounting Firm on
Internal Control Over Financial Reporting ..................................................................... 42
Consolidated Balance Sheets .......................................................................................... 43
Consolidated Statements of Operations ........................................................................... 44
Consolidated Statements of Cash Flows .......................................................................... 45
Consolidated Statements of Shareholders’ Equity ............................................................ 46
Notes to Consolidated Financial Statements .................................................................... 47
Corporate Information ...................................................................................................... 85
Board of Directors ........................................................................................................... 86
Corporate Officers ........................................................................................................... 86
Genesco’s Retail Network ................................................................................................ 87
This annual report contains certain forward-looking statements. Actual results could be materially different. For discussion of
some of the factors that could adversely affect future results, please see “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and the material under the caption “Risk Factors” in the Company’s annual report on form
10-K for Fiscal 2010 filed with the Securities and Exchange Commission.
1
f i n a n c i a l h i G h l i G h T s
For THe FISCAL YeAr:
Net Sales
Earnings From Continuing Operations
Net Earnings
Diluted Earnings Per Common Share
From Continuing Operations
Diluted Net Earnings Per Share
AT YeAr end:
Working Capital
Long-Term Debt
Shareholders’ Equity
Shares Outstanding
Book Value Per Share
Approximate Number of Common
Shareholders of Record
2010
2009
% CHANGE
$ 1,574,352,000
$ 1,551,562,000
$
$
$
$
29,086,000
28,813,000
1.31
1.30
$ 280,415,000
$
-0-
$ 582,313,000
24,074,000
$
23.97
3,400
$
$
$
$
$
$
$
$
156,219,000
150,756,000
6.72
6.49
259,137,000
113,735,000
449,755,000
19,244,000
23.10
4,700
1 %
(81)%
(81)%
(81)%
(80)%
8 %
(100)%
29 %
25 %
4 %
s e c u r i T i e s i n f o r m aT i o n
C O M M O N S T O C K : N E W Y O R K A N D C H I C A G O S T O C K E x C H A N G E S
Quarter ended May 2
Quarter ended August 1
Quarter ended October 31
Quarter ended January 30
Approximate number of common shareholders of record: 3,400
Fiscal 2010
Fiscal 2009
Fiscal 2008
High
23.26
26.51
29.69
29.71
Low
11.31
17.51
19.73
23.11
High
33.50
31.91
38.74
25.08
Low
18.76
20.33
18.99
10.37
High
51.30
54.15
52.06
45.67
Low
34.57
47.09
41.00
24.98
CREDITS: RETAIL PHOTOS: ©CHun Y. LAI. ALL RIgHTS RESERvED. PERmISSIOn IS REquIRED fOR AnY OTHER REPRODuCTIOn OR DISTRIbuTIOn. LIfESTYLE AnD
PRODuCT SHOTS PROvIDED bY gEnESCO OPERATIng DIvISIOnS. PAgE 4 PHOTO: DAnA THOmAS
2
T o Ta l r e T u r n T o s h a r e h o l d e r s
INCLUDES REINVESTMENT OF DIVIDENDS
The graph below compares the cumulative total shareholder return on the Company’s common stock for the last five fiscal years with the cumulative total
return of (i) the S&P 500 Index and (ii) the S&P 1500 Footwear Index. The graph assumes the investment of $100 in the Company’s common stock, the S&P
500 Index and the S&P 1500 Footwear Index at the market close on January 31, 2005 and the reinvestment monthly of all dividends.
c o m pa r i s o n o f 5 Y e a r c u m u l aT i v e T o Ta l r e T u r n
3 5 0
3 0 0
2 5 0
2 0 0
15 0
10 0
5 0
0
FYe 05
GENESCO INC.
S&P 500 INDEx
S&P 1500 FOOTWEAR INDEx
FYe 06
FYe 07
FYe 08
FYe 09
FYe 10
Genesco Inc.
S&P 500 Index
S&P 1500 Footwear Index*
Base
Period
FYe 05
$ 100.00
100.00
100.00
Index returns
Years ended
FYe 06
$ 136.17
111.63
104.25
FYe 07
$ 144.89
128.37
130.20
FYe 08
$ 118.72
126.05
151.79
FYe 09
$ 60.48
76.43
96.25
FYe 10
$ 92.61
101.76
143.66
* The S&P 1500 Footwear Index consists of Crocs Inc., Deckers Outdoor Corp., Iconix Brand Group, Inc., K-Swiss Inc., Nike Inc., Skechers U.S.A. Inc., Timberland Co. and Wolverine World Wide.
3
S H A r e H o L d e r S ’ M e S S A g e
To our shareholders:
We started Fiscal 2010 aware of the challenges
inherent in one of the sharpest and most
protracted economic downturns in memory. But
we were also convinced that such an economic
climate presented genuine opportunities for a
healthy company like ours, and we resolved to
make the most of them.
THe YeAr
While our sales reflected generally weak demand,
we were pleased with the results we were able
to produce through prudent management. Our
divisional operators managed their businesses
with tremendous skill, keeping inventories and
expenses under control and using their slower
rate of growth to generate cash.
bOb DE n n IS
We ended the year in a strong financial position, much improved from where we began. First, we induced the conversion of
more than $86 million of convertible notes into equity. Second, through tight control of working capital and an appropriate
reduction in capital expenditures, we were able to completely pay down our revolving credit balance. As a result, we
ended the year with $82 million in cash and, for the first time in decades, no debt on the balance sheet.
In addition to strengthening the balance sheet, careful management of expenses across the Company and improvements
in gross margin in many of our businesses produced earnings in excess of both our plans and external expectations
for the year.
Reflecting our belief that the business climate represented a “glass half full,” we focused on improving our longer term
prospects. We reacted to the economic fallout by closing some of our worst performing stores, negotiating lower rents
in others, and improving our internal processes to lower store construction costs, which will reduce future depreciation
expense. We have learned lessons in this process that should help us to operate more efficiently even when the economy
fully recovers.
THe FuTure
Looking forward, we plan to continue building on three fundamental strategic principles.
First, we believe that our defining strength is operating niche consumer businesses that are difficult for others to replicate.
We believe our existing businesses meet this test, and we look to continue to grow them wherever possible. We are
focused, Company-wide, on efforts to improve our operating margin, which has come in around 5% for the past three
years. Given the power of the niche positioning of our businesses, we believe we should be able to achieve operating
margins at least in the historical range of 8% to 9% as the economic recovery progresses and we build on the strategic
and operational improvements we have made.
Second, we continue to look for opportunities that leverage our existing, carefully targeted central support structure and
that complement or extend the reach of our existing businesses. Even as we test new geographic markets, we recognize
that we can no longer depend on rolling out more and more Journeys and Lids stores as our prime source of longer-term
growth. As an example of how we seek to supplement our organic growth, our division formerly known as Hat World has
enjoyed particular success, both in acquiring regional chains to enhance the coverage of the original retail hat business
of its Lids stores and also in adding compatible lines of business, such as the team dealer operation now known as Lids
Team Sports and the chain of retail fan shops now called Lids Locker Room. We have renamed the division “Lids Sports”
4
to reflect the new strategic position that these additions have given it. Our goal is to have sports-oriented customers
think of Lids as a primary resource, whether they are thinking of the teams they play for or the teams they root for. We
continue actively to pursue opportunities to grow each of the three major components of this division through acquisitions.
Additionally, we are open to similar opportunities for the Journeys Group, Johnston & Murphy Group, and Licensed
Brands to acquire businesses that complement their existing operations or leverage their skill sets.
As our third and final strategic principle, we intend to maintain an entrepreneurial environment where growth-oriented
leaders and their businesses can thrive. We achieve this by driving down responsibility and accountability into our
divisions and rewarding these operating business units using EVA-based performance measures. We seek to encourage
responsible entrepreneurship in our operations by offering an uncapped annual incentive based upon improving profits
and asset utilization, with appropriate “banking” and recapture provisions in case of deterioration in subsequent years, to
discourage excessive risk taking and an overly short-term focus. With this overall approach, we attract and retain talented
managers willing to “bet on themselves.”
A large measure of our success during Fiscal 2010 is a reflection of the Company’s outstanding management team, whose
talent, experience, and commitment are unparalleled. I salute the entire team, and am fortunate to have them as colleagues.
Finally, I want to recognize our retiring chairman, Hal Pennington. The current strength of Genesco, which has become
even more evident in the past year, bears witness to Hal’s focus as CEO on improving the Company’s strategic position.
Most important, Hal’s integrity and character and his commitment to Genesco throughout his more than 48 years with
the Company have made him a model of leadership and have left a permanent imprint on Genesco’s special culture.
I am honored to follow him as Genesco’s chairman and look forward to continuing to draw on his experience and insight
in the year ahead.
We enter Fiscal 2011 with good momentum, well positioned to capitalize on what we hope is an improving economy. I am
confident that our leadership team and employees are united in their commitment in building on the foundation we laid in
Fiscal 2010. I look forward to reporting to you on our progress.
Robert J. Dennis
Chairman, President and Chief Executive Officer
Genesco Inc.
EVA®
Genesco has been an EVA company since 1999. EVA advances the analysis of operating performance one
step beyond profitability by taking efficiency in capital usage into account. Essentially, EVA recognizes that
companies create the most wealth for their shareholders by making the greatest possible profit with the fewest
possible net assets. In fiscal 2010 we did not exceed our annual EVA improvement goal. Because everyone at
Genesco recognizes the link between EVA improvement, shareholders wealth creation (and, not insignificantly,
our own incentive compensation), we are committed to continue growing earnings while tightly managing
assets, to meet or exceed our EVA improvement goals.
EVA is a registered trademark of Stern Stewart & Co
5
6
Hat World, Inc. is comprised of three businesses – the LIDS retail headwear stores, the LIDS Locker Room
specialty fan retail chain, and the LIDS Team Sports wholesale team sports business. Operating out of
Indianapolis, Indiana, the two retail businesses make up more than 900 mall-based, airport, street level and
factory outlet locations nationwide, and in Canada and Puerto Rico. LIDS retail stores offer officially-licensed and
branded college, major professional sports teams, as well as other specialty fashion categories all in the latest
styles and colors. The company also operates smaller headwear retail brands Hat World and Hat Shack. LIDS
Locker Room is a mall-based retailer of sports headwear, apparel, accessories, and novelties, and also operates
Sports Fan-Attic stores. Most LIDS and LIDS Locker Room stores also offer custom embroidery capability. In
addition, licensed LIDS stores operate in Hong Kong and China. LIDS Team Sports is a full-service team uniform
and apparel dealer, custom screen printer, embroidery and sporting
goods distributor. Hat World, Inc. also operates Internet sites
www.lids.com, www.lids.ca and www.lidsteamsports.com.
7
8
Journeys is a leader in the teen specialty retail scene, with 819 stores in all 50 states, Puerto Rico, U.S.
Virgin Islands and most recently Canada. Journeys uses fashion savvy and merchandising science to
keep in step with the fast-paced footwear and accessories market for 13- to 22-year-old guys and girls.
Journeys offers a wide variety of trendy, relevant brands that cater to teens who seek the hottest, new
styles. The Journeys store is more than a retail environment; it’s an extension of the teen lifestyle. From the
plasma TVs playing exclusive content and the latest music videos, to our visual merchandising strategy
and promotions, to our employees whose image and style reflect our customers’ lifestyle and attitude; the
Journeys store is designed to stay relevant and engage our core customer. In addition, Journeys reaches
its customers through www.journeys.com, a mobile website, catalog, national advertising, strategic
cross-promotions, social media – facebook.com/journeys, twitter.com/journeysshoes,
youtube.com/journeysshoes, and an annual music and action sports tour – the
Journeys Backyard BBQ (journeysbbq.com). Journeys – An Attitude You Can Wear!
9
Launched in 2001 as an extension of the highly successful Journeys footwear retail concept, Journeys
Kidz is a unique branded kids’ footwear retailer, targeting customers 5 to 12 years old with trendy
footwear styles and accessories. Whether it’s the skateboard-style footwear display, the Playstation
terminals, or the TVs playing cartoons and music, Journeys Kidz has a visually exciting atmosphere
that is both fun for kids and functional for parents. In addition to 150 stores,
Journeys Kidz reaches its customers through www.journeyskidz.com, catalog,
mobile website, brand promotions, consumer contests and strategic partnerships.
10
11
Shi by Journeys is a brand extension from the Company’s successful Journeys division. Shi by Journeys
caters to fashionable women from their early 20s to mid 30s, and is designed to continue to serve the
Journeys female customer as she matures and her fashion tastes evolve. With 56 stores across the United
States, this specialty store features fashionable branded and private label footwear and accessories relevant
to the lifestyle of its trendy customer. Shi by Journeys reaches its customers through
www.shibyjourneys.com, national advertising, a mobile website and a direct mail catalog.
12
13
14
Underground Station is a mall-based specialty retail concept with 170 stores located across
the United States. Underground Station services the footwear and accessory needs of
young men and women ages 20–35 who are culturally diverse, fashion conscious and
lead a lifestyle influenced by trendy, street fashion. In addition to stores that are designed to
reflect the core consumer’s lifestyle, Underground Station reaches its target market through
undergroundstation.com, facebook.com/undergroundstation, a seasonal
product newsletter and strategic endemic and non-endemic cross promotions.
15
16
Craftsmanship, innovation and style are the hallmarks of the Johnston & Murphy brand. Johnston & Murphy
continues to appeal to successful, affluent men with a broad array of footwear, apparel, luggage, leather
goods and accessories. In addition, Johnston & Murphy continues to expand its collection of women’s
footwear, handbags, outerwear and accessories designed to appeal to stylish, affluent women. At Johnston &
Murphy, world-class service is the defining element of the shopping experience, combining a warm and
inviting store environment with a commitment to understand the needs of our consumers and continually
exceed their expectations in both product and service. The brand strives to position itself in stores in better
malls and airports across America. The brand also sells merchandise and promotes its stores through a
direct mail catalog, the internet at www.johnstonmurphy.com and through
premier specialty and department stores nationwide as well as internationally.
17
The Licensed Brands division is composed primarily of footwear marketed under the Dockers Footwear
name, for which Genesco has had the exclusive men’s footwear license in the U.S. since 1991. Designed
with an emphasis on style and performance, Dockers Footwear has become a leader in men’s dress
casual and casual shoes. Marketed under license from Levi Strauss & Co., Dockers remains one of the
nation’s most recognized brand names. It is the quintessential source for casual, authentic and stylish
apparel and footwear. The brand has evolved into a full lifestyle resource providing superior styling, quality
and value. Dockers Footwear is available through many of the same national chains
that carry Dockers apparel, and in shoe chains and shoe stores across the country.
18
19
Genesco inc. AND SUBSIDIARIES
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
forward-looking statements
This discussion and the notes to the Consolidated Financial Statements include certain forward-looking statements,
which include statements regarding our intent, belief or expectations and all statements other than those made
solely with respect to historical fact. Actual results could differ materially from those reflected by the forward-looking
statements in this discussion and a number of factors may adversely affect the forward looking statements and
the Company’s future results, liquidity, capital resources or prospects. These include continuing weakness in the
consumer economy, inability of customers to obtain credit, fashion trends that affect the sales or product margins of
the Company’s retail product offerings, changes in buying patterns by significant wholesale customers, bankruptcies
or deterioration in financial condition of significant wholesale customers, disruptions in product supply or distribution,
unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs, and other factors affecting
the cost of products, competition in the Company’s markets and changes in the timing of holidays or in the onset of
seasonal weather affecting period-to-period sales comparisons. Additional factors that could affect the Company’s
prospects and cause differences from expectations include the ability to build, open, staff and support additional
retail stores, to renew leases in existing stores and to conduct required remodeling or refurbishment on schedule and
at expected expense levels, 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 or intangible assets or other adverse financial
consequences, unexpected changes to the market for our shares, variations from expected pension-related charges
caused by conditions in the financial markets, and the outcome of litigation and environmental matters involving the
Company. For a discussion of additional risk factors, See Item 1A, Risk Factors, in the Company’s Annual Report on
Form 10-K.
overview
d e s c r i p T i o n o f B u s i n e s s
The Company is a leading retailer of branded footwear, of licensed and branded headwear and of licensed sports apparel
and accessories, operating 2,276 retail footwear, headwear and sports apparel and accessory stores throughout the
United States and, in Puerto Rico and Canada as of January 30, 2010. The Company also designs, sources, markets
and distributes footwear under its own Johnston & Murphy brand and under the licensed Dockers® brand to more than
900 retail accounts in the United States, including a number of leading department, discount, and specialty stores.
The Company operates five reportable business segments (not including corporate): Journeys Group, comprised
of the Journeys, Journeys Kidz and Shi by Journeys retail footwear chains, catalog and e-commerce operations;
Underground Station Group, comprised of the Underground Station retail footwear chain and e-commerce operations
and the Company’s remaining Jarman retail footwear stores; Hat World Group, comprised primarily of the Hat World,
Lids, Hat Shack, Hat Zone, Head Quarters, Cap Connection and Lids Locker Room retail headwear stores and
e-commerce operations, the Sports Fan-Attic retail licensed sports headwear, apparel and accessory stores acquired
in November 2009, and the Impact Sports and Great Plains Sports team dealer businesses acquired in November
2008 and September 2009, respectively; Johnston & Murphy Group, comprised of Johnston & Murphy retail operations,
catalog and e-commerce operations and wholesale distribution; and Licensed Brands, comprised primarily of Dockers®
Footwear, sourced and marketed under a license from Levi Strauss & Company.
The Journeys retail footwear stores sell footwear and accessories primarily for 13- to-22-year-old men and women.
The stores average approximately 1,950 square feet. The Journeys Kidz retail footwear stores sell footwear primarily
for younger children, ages five to 12. These stores average approximately 1,425 square feet. Shi by Journeys retail
footwear stores sell footwear and accessories to fashion-conscious women in their early 20s to mid 30s. These stores
average approximately 2,150 square feet.
The Underground Station retail footwear stores sell footwear and accessories primarily for men and women in the
20- to-35-age group and in the urban market. The Underground Station Group stores average approximately 1,800
square feet. The Company plans to shorten the average lease life of the Underground Station stores, close certain
underperforming stores as the opportunity presents itself, and attempt to secure rent relief on other locations while it
assesses the future prospects for the chain.
20
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
Genesco inc. AND SUBSIDIARIES
The Hat World Group includes stores and kiosks that sell licensed and branded headwear to men and women primarily
in the early-teens to mid-20s age group and Sports Fan-Attic stores that sell licensed sports headwear, apparel and
accessories to sports fans of all ages. The Hat World store locations average approximately 800 square feet and are
primarily in malls, airports, street level stores and factory outlet centers throughout the United States, and in Puerto
Rico and Canada. Sports Fan-Attic locations average approximately 3,075 square feet and are in malls primarily in
the Southeastern United States. In November 2008, the Company acquired Impact Sports, a team dealer business,
as part of the Hat World Group. In September 2009, the Company acquired Great Plains Sports, also a team dealer
business, as part of the Hat World Group. In November 2009, the Company acquired Sports Fan-Attic, as part of the
Hat World Group.
Johnston & Murphy retail shops sell a broad range of men’s footwear, luggage and accessories. Johnston & Murphy
introduced a line of women’s footwear and accessories in select Johnston & Murphy retail shops in the fall of 2008.
Johnston & Murphy shops average approximately 1,475 square feet and are located primarily in better malls nationwide
and in airports. Johnston & Murphy shoes are also distributed through the Company’s wholesale operations to better
department and independent specialty stores. In addition, the Company sells Johnston & Murphy footwear and
accessories in factory stores, averaging approximately 2,350 square feet, located in factory outlet malls, and through
a direct-to-consumer catalog and e-commerce operation.
The Company entered into an exclusive license with Levi Strauss & Co. to market men’s footwear in the United States
under the Dockers® brand name in 1991. Levi Strauss & Co. and the Company have subsequently added additional
territories, including Canada and Mexico and in certain other Latin American countries. The Dockers license agreement
was renewed May 15, 2009. The Dockers license agreement, as amended, expires on December 31, 2012. The
Company uses the Dockers name to market casual and dress casual footwear to men aged 30 to 55 through many
of the same national retail chains that carry Dockers slacks and sportswear and in department and specialty stores
across the country.
s T r aT e G Y
The Company’s long-term strategy for many years has been to seek organic growth by: 1) increasing the Company’s
store base, 2) increasing retail square footage, 3) improving comparable store sales, 4) increasing operating margin
and 5) enhancing the value of its brands. The pace of the Company’s organic growth may be limited by saturation
of its markets and by economic conditions. In Fiscal 2010, the Company slowed the pace of new store openings and
focused on inventory management and cash flow in response to the recent economic downturn. The Company has
also focused on opportunities provided by the economic climate to negotiate occupancy cost reductions, especially
where lease provisions triggered by sales shortfalls or declining occupancy of malls would permit the Company to
terminate leases.
To supplement its organic growth potential, the Company has made acquisitions and expects to consider acquisition
opportunities, either to augment its existing businesses or to enter new businesses that it considers compatible with its
existing businesses, core expertise and strategic profile. Acquisitions involve a number of risks, including inaccurate
valuation of the acquired business, the assumption of undisclosed liabilities, the failure to integrate the acquired
business appropriately, and distraction of management from existing businesses. The Company seeks to mitigate
these risks by applying appropriate financial metrics in its valuation analysis and developing and executing plans for
due diligence and integration that are appropriate to each acquisition.
More generally, the Company attempts to develop strategies to mitigate the risks it views as material, including those
discussed under the caption “Forward looking Statements,” above and those discussed in Item 1A, Risk Factors,
in the Company’s Annual Report on Form 10-K. Among the most important of these factors are those related to
consumer demand. Conditions in the external economy can affect demand, resulting in changes in sales and, as
prices are adjusted to drive sales and manage inventories, in gross margins. Because fashion trends influencing many
of the Company’s target customers (particularly customers of Journeys Group, Underground Station Group and Hat
World Group) can change rapidly, the Company believes that its ability to react quickly to those changes has been
important to its success. Even when the Company succeeds in aligning its merchandise offerings with consumer
21
Genesco inc. AND SUBSIDIARIES
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
preferences, those preferences may affect results by, for example, driving sales of products with lower average selling
prices. Moreover, economic factors, such as the recession and the current high level of unemployment, may reduce the
consumer’s disposable income or his or her willingness to purchase discretionary items, and thus may reduce demand
for the Company’s merchandise, regardless of the Company’s skill in detecting and responding to fashion trends. The
Company believes its experience and discipline in merchandising and the buying power associated with its relative size in
the industry are important to its ability to mitigate risks associated with changing customer preferences and other reductions
in consumer demand.
s u m m a r Y o f r e s u lT s o f o p e r aT i o n s
The Company’s net sales increased 1.5% during Fiscal 2010 compared to Fiscal 2009. The increase was driven primarily
by a 15% increase in Hat World Group sales, offset by a 10% decrease in Underground Station Group sales, a 7% decrease
in Johnston & Murphy Group sales, a 3% decrease in Licensed Brands sales and a 1% decrease in Journeys Group sales.
Gross margin increased as a percentage of net sales during Fiscal 2010, primarily due to margin increases in the Journeys
Group, Underground Station Group and Licensed Brands offset by margin decreases in the Hat World Group and Johnston &
Murphy Group. Selling and administrative expenses decreased as a percentage of net sales during Fiscal 2010, reflecting
the absence of merger-related expenses and expense decreases as a percentage of net sales in the Hat World Group,
offset by increases as a percentage of net sales in the Journeys Group, Underground Station Group, Johnston & Murphy
Group and Licensed Brands. Last year’s selling and administrative expenses included $8.0 million of expenses related to
the terminated merger agreement and related litigation. See the discussion under “Terminated Merger Agreement,” below.
Earnings from operations decreased as a percentage of net sales during Fiscal 2010, primarily due to the absence of the
gain on the settlement of merger-related litigation, decreased earnings from operations in the Johnston & Murphy Group and
Journeys Group, offset by the absence of merger-related expenses this year and increased earnings from operations in the
Hat World Group and Licensed Brands as well as a smaller loss in the Underground Station Group.
significant developments
c h a n G e i n m e T h o d o f a c c o u n T i n G f o r c o n v e r T i B l e s u B o r d i n aT e d d e B e n T u r e s
In May 2008, the Financial Accounting Standards Board (“FASB”) updated the Debt Topic, specifically Debt with Conversion
and Other Options, of the Codification to require the issuer of certain convertible debt instruments that may be settled in cash
(or other assets) on conversion to separately account for the liability (debt) and equity (conversion option) components of
the instrument in a manner that reflects the issuer’s nonconvertible debt borrowing rate. The Company adopted this update
to the Codification as of February 1, 2009. The value assigned to the debt component is the estimated fair value, as of the
issuance date, of a similar debt instrument without the conversion feature, and the difference between the proceeds for the
convertible debt and the amount reflected as a debt liability is then recorded as additional paid-in capital. As a result, the
debt is effectively recorded at a discount reflecting its below market coupon interest rate. The debt is subsequently accreted
to its par value over its expected life, with the rate of interest that reflects the market rate at issuance being reflected in the
Consolidated Statements of Operations. The Company has applied this update to the Codification retrospectively to its
Consolidated Financial Statements, as required. The retroactive application of this update to the Codification resulted in the
recognition of additional pretax non-cash interest expense for Fiscal 2009 and 2008 of $3.1 and $2.8 million, respectively. For
additional information, see Note 2 to the Consolidated Financial Statements.
c o n v e r s i o n o f 4 1 / 8 % d e B e n T u r e s
On April 29, 2009, the Company entered into separate exchange agreements whereby it acquired and retired $56.4 million
in aggregate principal amount ($51.3 million fair value) of its Debentures due June 15, 2023 in exchange for the issuance of
3,066,713 shares of its common stock, which include 2,811,575 shares that were reserved for conversion of the Debentures
and 255,138 additional inducement shares, and a cash payment of approximately $0.9 million. The inducement was not
deductible for tax purposes. During the fourth quarter of Fiscal 2010, holders of an aggregate of $21.04 million principal
amount of its 4 1/8% Convertible Subordinated Debentures were converted to 1,048,764 shares of common stock pursuant
to separate conversion agreements which provided for payment of an aggregate of $0.3 million to induce conversion. On
November 4, 2009, the Company issued a notice of redemption to the remaining holders of the $8.775 million outstanding
4 1/8% Convertible Subordinated Debentures. As permitted by the Indenture, holders of all except $1,000 in principal
amount of the remaining Debentures converted their Debentures to 437,347 shares of common stock prior to the redemption
22
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
Genesco inc. AND SUBSIDIARIES
date of December 3, 2009. As a result of the exchange agreements and conversions, the Company recognized a loss on
the early retirement of debt of $5.5 million in Fiscal 2010, reflected on the Consolidated Statements of Operations. After
the exchanges and conversions, there was zero aggregate principal amount of Debentures outstanding. For additional
information on the conversion of the Debentures, see Note 8 to the Consolidated Financial Statements.
s p o r T s fa n - aT T i c a c q u i s i T i o n
In the fourth quarter of Fiscal 2010, the Company’s Hat World subsidiary acquired the assets of Sports Fan-Attic, a retailer
of licensed sports headwear, apparel, accessories and novelties, with 37 stores in seven states as of January 30, 2010, for
a preliminary purchase price of $13.9 million plus assumed debt of $1.6 million with $4.5 million of that amount withheld
until satisfaction of certain closing contingencies. Subsequently, in February 2010, $3.0 million of the $4.5 million was paid.
G r e aT p l a i n s s p o r T s a c q u i s i T i o n
In the third quarter of Fiscal 2010, the Impact Sports division of Hat World acquired the assets of Great Plains Sports of St.
Paul, Minnesota, for a preliminary purchase price of $2.9 million plus assumed debt of $1.1 million with $0.6 million withheld
until satisfaction of certain closing contingencies. Great Plains Sports is a dealer of branded athletic and team products for
colleges, high schools, corporations and youth organizations and also operates a sporting goods store in St. Paul, Minnesota.
s h a r e r e p u r c h a s e p r o G r a m
In March 2008, the board authorized up to $100.0 million in stock repurchases primarily funded with the after-tax cash
proceeds of the settlement of merger-related litigation discussed above under the heading “Terminated Merger Agreement.”
The Company repurchased 4.0 million shares at a cost of $90.9 million during Fiscal 2009. The Company repurchased
85,000 shares at a cost of $2.0 million during Fiscal 2010. In February 2010, the board increased the total repurchase
authorization to $35.0 million.
T e r m i n aT e d m e r G e r a G r e e m e n T
The Company announced in June 2007 that the boards of directors of both Genesco and The Finish Line, Inc. had unanimously
approved a definitive merger agreement under which The Finish Line would acquire all of the outstanding common shares
of Genesco at $54.50 per share in cash (the “Proposed Merger”). The Finish Line refused to close the Proposed Merger and
litigation ensued. The Proposed Merger and related agreement were terminated in March 2008 in connection with an agreement
to settle the litigation with The Finish Line and UBS Loan Finance LLC and UBS Securities LLC (collectively, “UBS”) for a cash
payment of $175.0 million to the Company and a 12% equity stake in The Finish Line, which the Company received in the first
quarter of Fiscal 2009. The Company distributed the 12% equity stake, or 6,518,971 shares of Class A Common Stock of
The Finish Line, Inc., on June 13, 2008, to its common shareholders of record on May 30, 2008, as required by the settlement
agreement. During Fiscal 2009 and 2008, the Company expensed $8.0 million and $27.6 million, respectively, in merger-related
litigation costs. The total merger-related litigation costs for Fiscal 2008 of $27.6 million were tax deductible in Fiscal 2009
and resulted in a permanent tax benefit reflected as a component of income tax expense. For additional information, see the
“Merger-Related Litigation” section in Note 15 to the Company’s Consolidated Financial Statements.
r e s T r u c T u r i n G a n d o T h e r c h a r G e s
The Company recorded a pretax charge to earnings of $13.5 million in Fiscal 2010. The charge reflected in restructuring and
other, net included $13.3 million for retail store asset impairments and $0.4 million for lease terminations offset by $0.3 million
for other legal matters. Also included in the charge was $0.1 million in excess markdowns related to the lease terminations
which is reflected in cost of sales on the Consolidated Statements of Operations.
The Company recorded a total pretax charge to earnings of $7.7 million in Fiscal 2009. The charge reflected in restructuring
and other, net included $8.6 million of charges for retail store asset impairments, $1.6 million for lease terminations and
$1.1 million for other legal matters, offset by a $3.8 million gain from a lease termination transaction. Also included in the
charge was $0.2 million in excess markdowns related to the store lease terminations which is reflected in cost of sales on the
Consolidated Statements of Operations.
The Company recorded a total pretax charge to earnings of $10.6 million in Fiscal 2008. The charge reflected in restructuring
and other, net included $8.7 million of charges for retail store asset impairments and $1.5 million for lease terminations,
offset by $0.5 million in excise tax refunds and an antitrust settlement. Also included in the charge was $0.9 million in excess
markdowns related to the lease terminations which is reflected in cost of sales on the Consolidated Statements of Operations.
23
Genesco inc. AND SUBSIDIARIES
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
p o s T r e T i r e m e n T B e n e f i T l i a B i l i T Y a d j u s T m e n T s
The return on pension plan assets was a gain of $21.2 million for Fiscal 2010 compared to a loss of $28.0 million in Fiscal
2009. The discount rate used to measure benefit obligations decreased from 6.875% to 5.625% in Fiscal 2010. As a result
of the increase in return on plan assets partially offset by the decrease in the discount rate, the pension liability decreased to
$20.4 million reflected in the Consolidated Balance Sheets compared to $26.0 million in Fiscal 2009. There was a decrease
in the pension liability adjustment of $1.2 million (net of tax) in accumulated other comprehensive loss in shareholders’ equity.
Depending upon future interest rates and returns on plan assets, and other known and unknown factors, there can be no
assurance that additional adjustments in future periods will not be required.
d i s c o n T i n u e d o p e r aT i o n s
For the year ended January 30, 2010, the Company recorded an additional charge to earnings of $0.5 million ($0.3 million net
of tax) reflected in discontinued operations, including $0.8 million primarily for anticipated costs of environmental remedial
alternatives related to former facilities operated by the Company offset by a $0.3 million gain for excess provisions to prior
discontinued operations. For additional information, see Note 15 to the Consolidated Financial Statements.
For the year ended January 31, 2009, the Company recorded an additional charge to earnings of $9.0 million ($5.5 million net
of tax) reflected in discontinued operations, including $9.4 million primarily for anticipated costs of environmental remedial
alternatives related to former facilities operated by the Company offset by a $0.4 million gain for excess provisions to prior
discontinued operations. For additional information, see Note 15 to the Consolidated Financial Statements.
For the year ended February 2, 2008, the Company recorded an additional charge to earnings of $2.6 million ($1.6 million net
of tax) reflected in discontinued operations, including $2.9 million primarily for anticipated costs of environmental remedial
alternatives related to former facilities operated by the Company offset by a $0.3 million gain for excess provisions to prior
discontinued operations. For additional information, see Note 15 to the Consolidated Financial Statements.
critical accounting policies
i n v e n T o r Y v a l u aT i o n
As discussed in Note 1 to the Consolidated Financial Statements, the Company values its inventories at the lower of
cost or market.
In its wholesale operations, cost is determined using the first-in, first-out (FIFO) method. Market is determined using
a system of analysis which evaluates inventory at the stock number level based on factors such as inventory turn,
average selling price, inventory level, and selling prices reflected in future orders. The Company provides reserves
when the inventory has not been marked down to market based on current selling prices or when the inventory is not
turning and is not expected to turn at levels satisfactory to the Company.
In its retail operations, other than the Hat World segment, the Company employs the retail inventory method, applying
average cost-to-retail ratios to the retail value of inventories. Under the retail inventory method, valuing inventory at the
lower of cost or market is achieved as markdowns are taken or accrued as a reduction of the retail value of inventories.
Inherent in the retail inventory method are subjective judgments and estimates including merchandise mark-on,
markups, markdowns, and shrinkage. These judgments and estimates, coupled with the fact that the retail inventory
method is an averaging process, could produce a range of cost figures. To reduce the risk of inaccuracy and to ensure
consistent presentation, the Company employs the retail inventory method in multiple subclasses of inventory and
analyzes markdown requirements at the stock number level based on factors such as inventory turn, average selling
price, and inventory age. In addition, the Company accrues markdowns as necessary. These additional markdown
accruals reflect all of the above factors as well as current agreements to return products to vendors and vendor
agreements to provide markdown support. In addition to markdown provisions, the Company maintains provisions for
shrinkage and damaged goods based on historical rates.
The Hat World segment employs the moving average cost method for valuing inventories and applies freight using an
allocation method. The Company provides a valuation allowance for slow-moving inventory based on negative margins
and estimated shrink based on historical experience and specific analysis, where appropriate.
24
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Genesco inc. AND SUBSIDIARIES
Inherent in the analysis of both wholesale and retail inventory valuation are subjective judgments about current market
conditions, fashion trends, and overall economic conditions. Failure to make appropriate conclusions regarding
these factors may result in an overstatement or understatement of inventory value. A change of 10 percent from the
recorded provisions for markdowns, shrinkage and damaged goods would have changed inventory by $1.1 million at
January 30, 2010.
i m pa i r m e n T o f lo n G - l i v e d a s s e T s
As discussed in Note 1 to the Consolidated Financial Statements, the Company periodically assesses the realizability of
its long-lived assets and evaluates such assets for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Asset impairment is determined to exist if estimated future
cash flows, undiscounted and without interest charges, are less than the carrying amount. Inherent in the analysis of
impairment are subjective judgments about future cash flows. Failure to make appropriate conclusions regarding these
judgments may result in an overstatement or understatement of the value of long-lived assets.
The goodwill impairment test involves a two-step process. The first step is a comparison of the fair value and carrying
value of the business unit with which the goodwill is associated. The Company estimates fair value using the best
information available, and computes the fair value by an equal weighting of the results derived by a market approach
and an income approach utilizing discounted cash flow projections. The income approach uses a projection of a
business unit’s estimated operating results and cash flows that is discounted using a weighted-average cost of capital
that reflects current market conditions. The projection uses management’s best estimates of economic and market
conditions over the projected period including growth rates in sales, costs, estimates of future expected changes in
operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth
rates, future estimates of capital expenditures and changes in future working capital requirements.
If the carrying value of the business unit is higher than its fair value, there is an indication that impairment may exist
and the second step must be performed to measure the amount of impairment loss. The amount of impairment is
determined by comparing the implied fair value of business unit goodwill to the carrying value of the goodwill in the
same manner as if the business unit was being acquired in a business combination. Specifically, we would allocate
the fair value to all of the assets and liabilities of the business unit, including any unrecognized intangible assets, in a
hypothetical analysis that would calculate the implied fair value of goodwill. If the implied fair value of goodwill is less
than the recorded goodwill, the Company would record an impairment charge for the difference.
A key assumption in the Company’s fair value estimate is the weighted average cost of capital utilized for discounting its
cash flow projections in its income approach. The Company believes the rate it used is consistent with the risks inherent
in its business and with industry discount rates. The Company performed sensitivity analyses on its estimated fair value
using the income approach. Holding all other assumptions constant as of the measurement date, the Company noted
that an increase in the weighted average cost of capital of 100 basis points would not result in impairment of its goodwill.
e n v i r o n m e n Ta l a n d o T h e r c o n T i n G e n c i e s
The Company is subject to certain loss contingencies related to environmental proceedings and other legal matters,
including those disclosed in Note 15 to the Company’s Consolidated Financial Statements. The Company has made
provisions for certain of these contingencies, including approximately $0.8 million reflected in Fiscal 2010, $9.4 million
reflected in Fiscal 2009 and $2.9 million reflected in Fiscal 2008. The Company monitors these matters on an ongoing
basis and, on a quarterly basis, management reviews the Company’s reserves and accruals in relation to each of
them, adjusting provisions as management deems necessary in view of changes in available information. Changes in
estimates of liability are reported in the periods when they occur. Consequently, management believes that its reserve
in relation to each proceeding is a best estimate of probable loss connected to the proceeding, or in cases in which
no best estimate is possible, the minimum amount in the range of estimated losses, based upon its analysis of the
facts and circumstances as of the close of the most recent fiscal quarter. However, because of uncertainties and risks
inherent in litigation generally and in environmental proceedings in particular, there can be no assurance that future
developments will not require additional reserves to be set aside, that some or all reserves will be adequate or that
the amounts of any such additional reserves or any such inadequacy will not have a material adverse effect upon the
Company’s financial condition or results of operations.
25
Genesco inc. AND SUBSIDIARIES
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
r e v e n u e r e c o G n i T i o n
Retail sales are recorded at the point of sale and are net of estimated returns and exclude sales taxes. Catalog and
internet sales are recorded at time of delivery to the customer and are net of estimated returns and exclude sales taxes.
Wholesale revenue is recorded net of estimated returns and allowances for markdowns, damages and miscellaneous
claims when the related goods have been shipped and legal title has passed to the customer. Shipping and handling
costs charged to customers are included in net sales. Estimated returns and allowances are based on historical
returns and allowances. Actual returns and allowances have not differed materially from estimates. Actual returns and
allowances in any future period may differ from historical experience.
i n c o m e Ta x e s
As part of the process of preparing Consolidated Financial Statements, the Company is required to estimate its income
taxes in each of the tax jurisdictions in which it operates. This process involves estimating actual current tax obligations
together with assessing temporary differences resulting from differing treatment of certain items for tax and accounting
purposes, such as depreciation of property and equipment and valuation of inventories. These temporary differences
result in deferred tax assets and liabilities, which are included within the Consolidated Balance Sheets. The Company
then assesses the likelihood that its deferred tax assets will be recovered from future taxable income. Actual results
could differ from this assessment if adequate taxable income is not generated in future periods. To the extent the
Company believes that recovery of an asset is at risk, valuation allowances are established. To the extent valuation
allowances are established, or increased in a period, the Company includes an expense within the tax provision in the
Consolidated Statements of Operations.
Income tax reserves are determined using the methodology required by the Income Tax Topic of the FASB Accounting
Standards Codification. This methodology was adopted by the Company as of February 4, 2007, and requires
companies to assess each income tax position taken using a two step process. A determination is first made as to
whether it is more likely than not that the position will be sustained, based upon the technical merits, upon examination
by the taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded for
the tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of the
respective tax position. Uncertain tax positions require determinations and estimated liabilities to be made based on
provisions of the tax law which may be subject to change or varying interpretation. If the Company’s determinations and
estimates prove to be inaccurate, the resulting adjustments could be material to its future financial results. See Note 11
to the Company’s Consolidated Financial Statements for additional information regarding income taxes.
p o s T r e T i r e m e n T B e n e f i T s p l a n a c c o u n T i n G
Full-time employees who had at least 1,000 hours of service in calendar year 2004, except employees in the Hat World
segment, are covered by a defined benefit pension plan. The Company froze the defined benefit pension plan effective
January 1, 2005. The Company also provides certain former employees with limited medical and life insurance benefits.
The Company funds at least the minimum amount required by the Employee Retirement Income Security Act.
As required by the Compensation-Retirement Benefits Topic of the FASB Accounting Standards Codification, the Company
is required to recognize the overfunded or underfunded status of postretirement benefit plans as an asset or liability in
their Consolidated Balance Sheets and to recognize changes in that funded status in accumulated other comprehensive
loss, net of tax, in the year in which the changes occur. The Company is required to measure the funded status of a plan
as of the date of its fiscal year end. The Company adopted the measurement date change as of January 31, 2009. The
Company was required to change the measurement date for its defined benefit pension plan and postretirement benefit
plan from December 31 to January 31 (end of fiscal year). As a result of this change, pension expense and actuarial
gains/losses for the one-month period ended January 31, 2009 were recognized as adjustments to retained earnings and
accumulated other comprehensive loss, respectively. The after-tax charge to retained earnings was $0.1 million. The
adoption of the measurement date provision had no effect on the Company’s Consolidated Statements of Operations for
Fiscal 2009 or any prior period presented.
The Company accounts for the defined benefit pension plans using the Compensation-Retirement Benefits Topic of the
FASB Accounting Standards Codification. As permitted under this topic, pension expense is recognized on an accrual
basis over employees’ approximate service periods. The calculation of pension expense and the corresponding liability
26
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
Genesco inc. AND SUBSIDIARIES
requires the use of a number of critical assumptions, including the expected long-term rate of return on plan assets and
the assumed discount rate, as well as the recognition of actuarial gains and losses. Changes in these assumptions can
result in different expense and liability amounts, and future actual experience can differ from these assumptions.
LO N G T E R M R AT E O F R E T U R N A S S U M P T I O N – Pension expense increases as the expected rate of return on pension
plan assets decreases. The Company estimates that the pension plan assets will generate a long-term rate of return
of 8.25%. To develop this assumption, the Company considered historical asset returns, the current asset allocation
and future expectations of asset returns. The expected long-term rate of return on plan assets is based on a long-
term investment policy of 50% U.S. equities, 13% international equities, 35% U.S. fixed income securities and 2% cash
equivalents. For Fiscal 2010, if the expected rate of return had been decreased by 1%, net pension expense would
have increased by $1.0 million, and if the expected rate of return had been increased by 1%, net pension expense
would have decreased by $1.0 million.
D I S C O U N T R AT E – Pension liability and future pension expense increase as the discount rate is reduced. The
Company discounted future pension obligations using a rate of 5.625%, 6.875% and 5.875% for Fiscal 2010, 2009
and 2008, respectively. The discount rate at January 30, 2010 was determined based on a yield curve of high quality
corporate bonds with cash flows matching the Company’s plans’ expected benefit payments. For Fiscal 2010, if the
discount rate had been increased by 0.5%, net pension expense would have decreased by $0.5 million, and if the
discount rate had been decreased by 0.5%, net pension expense would have increased by $0.5 million. In addition, if
the discount rate had been increased by 0.5%, the projected benefit obligation would have decreased by $4.4 million
and the accumulated benefit obligation would have decreased by $4.4 million. If the discount rate had been decreased
by 0.5%, the projected benefit obligation would have been increased by $4.8 million and the accumulated benefit
obligation would have increased by $4.8 million.
A M O R T I Z AT I O N O F G A I N S A N D LO S S E S – The Company utilizes a calculated value of assets, which is an averaging
method that recognizes changes in the fair values of assets over a period of five years. At the end of Fiscal 2010, the
Company had unrecognized actuarial losses of $47.7 million. Accounting principles generally accepted in the United
States require that the Company recognize a portion of these losses when they exceed a calculated threshold. These
losses might be recognized as a component of pension expense in future years and would be amortized over the
average future service of employees, which is currently approximately six years. Future changes in plan asset returns,
assumed discount rates and various other factors related to the pension plan will impact future pension expense and
liabilities, including increasing or decreasing unrecognized actuarial gains and losses.
The Company recognized expense for its defined benefit pension plans of $0.2 million, $1.4 million and $3.1 million
in Fiscal 2010, 2009 and 2008, respectively. The Company’s board of directors approved freezing the Company’s
defined pension benefit plan effective January 1, 2005. The Company’s pension expense is expected to increase in
Fiscal 2011 by approximately $2.4 million due to a larger actuarial loss to be amortized.
s h a r e - B a s e d c o m p e n s aT i o n
The Company has share-based compensation plans covering certain members of management and non-employee
directors. The Company recognizes compensation expense for share-based payments based on the fair value of the
awards as required by the Compensation – Stock Compensation Topic of the FASB Accounting Standards Codification.
For Fiscal 2010, 2009 and 2008, share-based compensation expense was $0.5 million, $1.7 million and $3.2 million,
respectively. For Fiscal 2010, 2009 and 2008, restricted stock expense was $6.5 million, $6.3 million and $4.6 million,
respectively. The benefits of tax deductions in excess of recognized compensation expense are reported as a financing
cash flow.
The Company estimates the fair value of each option award on the date of grant using a Black-Scholes option pricing
model. The application of this valuation model involves assumptions that are judgmental and highly sensitive in the
determination of compensation expense, including expected stock price volatility. The Company bases expected
volatility on historical term structures. The Company bases the risk free rate on an interest rate for a bond with a
maturity commensurate with the expected term estimate. The Company estimates the expected term of stock options
using historical exercise and employee termination experience. The Company does not currently pay a dividend on
common stock. The fair value of employee restricted stock is determined based on the closing price of the Company’s
stock on the date of the grant.
27
Genesco inc. AND SUBSIDIARIES
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
In addition to the key assumptions used in the Black-Scholes model, the estimated forfeiture rate at the time of
valuation (which is based on historical experience for similar options) is a critical assumption, as it reduces expense
ratably over the vesting period. Share-based compensation expense is recorded based on a 2% expected forfeiture
rate and is adjusted annually for actual forfeitures. The Company reviews the expected forfeiture rate annually to
determine if that percent is still reasonable based on historical experience. The Company believes its estimates are
reasonable in the context of actual (historical) experience. See Note 14 to the Consolidated Financial Statements for
additional information regarding the Company’s share-based compensation plans.
comparable store sales
Comparable store sales begin in the fifty-third week of a store’s operation. Temporarily closed stores are excluded from
the comparable store sales calculation for every full week of the store closing. Expanded stores are excluded from
the comparable store sales calculation until the fifty-third week of operation in the expanded format. Unless otherwise
specified, e-commerce and catalog sales are excluded from comparable store sales calculations.
results of operations – fiscal 2010 compared to fiscal 2009
The Company’s net sales for Fiscal 2010 increased 1.5% to $1.57 billion from $1.55 billion in Fiscal 2009. The increase
in net sales was a result of a higher number of stores in operation and an increase in comparable store sales in the
Hat World Group, offset by lower sales in the Journeys Group, reflecting negative comparable store sales of 3%, lower
sales in the Underground Station Group stores, reflecting fewer stores in operation and negative comparable store sales,
lower sales in the Johnston & Murphy Group, reflecting generally challenging economic conditions and a difficult retail
environment, and lower sales in Licensed Brands. Gross margin increased 2.0% to $795.9 million in Fiscal 2010 from
$780.0 million in Fiscal 2009 and increased as a percentage of net sales from 50.3% to 50.6%. Selling and administrative
expenses in Fiscal 2010 increased 0.7% from Fiscal 2009 but decreased as a percentage of net sales from 46.2% to
45.9%, primarily due to the absence of merger-related expenses and leveraging in the Hat World Group due to positive
comparable store sales. Expenses in Fiscal 2009 included $8.0 million in merger-related litigation expenses. The
Company records buying and merchandising and occupancy costs in selling and administrative expense. Because the
Company does not include these costs in cost of sales, the Company’s gross margin may not be comparable to other
retailers that include these costs in the calculation of gross margin. Explanations of the changes in results of operations
are provided by business segment in discussions following these introductory paragraphs.
Earnings from continuing operations before income taxes (“pretax earnings”) for Fiscal 2010 were $50.5 million
compared to $250.7 million for Fiscal 2009. Pretax earnings for Fiscal 2010 included restructuring and other charges
of $13.5 million including $13.3 million for retail store asset impairments and $0.4 million for lease terminations offset
by $0.3 million for other legal matters. Also included in pretax earnings was $0.1 million in excess markdowns related
to the lease terminations which is reflected in cost of sales on the Consolidated Statements of Operations. Pretax
earnings for Fiscal 2010 also included $5.5 million loss on early retirement of debt. Pretax earnings for Fiscal 2009
included a gain of $204.1 million from the settlement of merger-related litigation with The Finish Line and UBS and
restructuring and other charges of $7.7 million including $8.6 million for retail store asset impairments, $1.6 million
for lease terminations and $1.1 million for other legal matters offset by a $3.8 million gain on a lease termination
transaction. Also included in pretax earnings was $0.2 million in excess markdowns related to the lease terminations
which is reflected in cost of sales on the Consolidated Statements of Operations. Pretax earnings for Fiscal 2009 also
included $8.0 million in merger-related expenses.
Net earnings for Fiscal 2010 were $28.8 million ($1.30 diluted earnings per share) compared to $150.8 million ($6.49
diluted earnings per share) for Fiscal 2009. Net earnings for Fiscal 2010 includes $0.3 million ($0.01 diluted earnings
per share) charge to earnings (net of tax), including $0.5 million primarily for anticipated costs of environmental remedial
alternatives related to former facilities operated by the Company offset by a $0.2 million gain for excess provisions
to prior discontinued operations. Net earnings for Fiscal 2009 includes a $5.5 million ($0.23 diluted earnings per
share) charge to earnings (net of tax), including $5.7 million primarily for anticipated costs of environmental remedial
alternatives related to former facilities operated by the Company offset by a $0.2 million gain for excess provisions to
prior discontinued operations. The Company recorded an effective federal income tax rate of 42.4% for Fiscal 2010
28
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
Genesco inc. AND SUBSIDIARIES
compared to 37.7% for Fiscal 2009. This year’s effective tax rate of 42.4% reflects the non-deductibility of certain items
incurred in connection with the inducement of the conversion of the 4 1/8% Debentures for common stock this year.
Last year’s effective tax rate of 37.7% is primarily attributable to the deduction of prior period merger-related expenses
that became deductible upon termination of the Finish Line merger agreement offset by an income tax liability on an
increase in value of shares of common stock received in the settlement of litigation with The Finish Line that had no
corresponding income in the financial statements. In addition, last year’s effective rate was lower due to a $1.2 million
reduction in tax liabilities from an agreement reached on a state income tax contingency. See Notes 11 and 15 to the
Consolidated Financial Statements for additional information.
JourneYS grouP
d o L L A r S I n T H o u S A n d S
N e t s a l e s
E a r n i n g s f r o m o p e r a t i o n s
O p e r a t i n g m a r g i n
F I S C A L Y e A r e n d e d
P e r C e n T
2 0 1 0
2 0 0 9
$ 7 4 9 , 2 0 2 $ 7 6 0 , 0 0 8
$ 4 4 , 2 8 5 $ 4 9 , 0 5 0
6 . 5 %
5 . 9 %
C H A n g e
1 . 4 %
( 9 . 7 ) %
Net sales from Journeys Group decreased 1.4% to $749 million for Fiscal 2010 from $760.0 million for Fiscal 2009.
The decrease reflects primarily a 3% decrease in comparable store sales partially offset by a 3% increase in average
Journeys stores operated (i.e., the sum of the number of stores open on the first day of the fiscal year and the last day
of each fiscal month during the year divided by thirteen). The comparable store sales decrease reflects a 5% decrease
in footwear unit comparable sales offset by a 3% increase in average price per pair of shoes reflecting changes in
product mix. Total unit sales decreased 3% during the same period. The store count for Journeys Group was 1,025
stores at the end of Fiscal 2010, including 150 Journeys Kidz stores and 56 Shi by Journeys stores, compared to 1,012
Journeys Group stores at the end of Fiscal 2009, including 141 Journeys Kidz stores and 55 Shi by Journeys stores.
Journeys Group earnings from operations for Fiscal 2010 decreased 9.7% to $44.3 million, compared to $49.1 million
for Fiscal 2009. Improved gross margin as a percentage of net sales from lower markdowns was more than offset
by increased expenses both in dollars and as a percentage of net sales, reflecting negative leverage from negative
comparable store sales.
underground STATIon grouP
d o L L A r S I n T H o u S A n d S
N e t s a l e s
L o s s f r o m o p e r a t i o n s
O p e r a t i n g m a r g i n
F I S C A L Y e A r e n d e d
2 0 1 0
2 0 0 9
$ 9 9 , 4 5 8 $ 1 1 0 , 9 0 2
$
( 4 , 5 8 4 ) $ ( 5 , 6 6 0 )
( 5 . 1 ) %
( 4 . 6 )%
P e r C e n T
C H A n g e
( 1 0 . 3 ) %
1 9 . 0 %
Net sales from the Underground Station Group decreased 10.3% to $99.5 million for Fiscal 2010 from $110.9 million
for Fiscal 2009. The decrease reflects a 7% decrease in comparable store sales and a 6% decrease in average
Underground Station Group stores operated. The decrease in comparable store sales reflects a 1% decrease in
footwear unit comparable sales and a 3% decrease in the average price per pair of shoes, reflecting changes in
product mix. Unit sales decreased 5% during Fiscal 2010. Underground Station Group operated 170 stores at the
end of Fiscal 2010. The Company had operated 180 Underground Station Group stores at the end of Fiscal 2009.
The Company plans to continue to shorten the average lease life of the Underground Station stores, close certain
underperforming stores as the opportunity presents itself, and attempt to secure rent relief on other locations while it
assesses the future prospects for the chain.
Underground Station Group loss from operations for Fiscal 2010 improved to $(4.6) million compared to $(5.7) million
for the same period last year. The improvement was due to increased gross margin as a percentage of net sales
reflecting improvement in initial mark-on from changes in product mix.
HAT WorLd grouP
d o L L A r S I n T H o u S A n d S
N e t s a l e s
E a r n i n g s f r o m o p e r a t i o n s
O p e r a t i n g m a r g i n
29
F I S C A L Y e A r e n d e d
P e r C e n T
2 0 1 0
2 0 0 9
$ 4 6 5 , 7 7 6 $ 4 0 5 , 4 4 6
$ 4 4 , 0 3 9 $ 3 6 , 6 7 0
9 . 0 %
9 . 5 %
C H A n g e
1 4 . 9 %
2 0 . 1 %
Genesco inc. AND SUBSIDIARIES
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
Net sales from the Hat World Group increased 14.9% to $465.8 million for Fiscal 2010 from $405.4 million for Fiscal
2009. The increase reflects primarily a $24.7 million increase in sales related to Impact Sports and Great Plains Sports,
a 3% increase in comparable store sales, a 2% increase in average stores operated and $11.7 million in sales from the
newly acquired Sports Fan-Attic business. The comparable store sales increase reflected a 4% increase in average
price per hat from higher prices in Major League Baseball products and branded action headwear, offset by a 1%
decrease in comparable store headwear units sold, primarily from weakness in NCAA and NFL products. Hat World
Group operated 921 stores at the end of Fiscal 2010, including 60 stores in Canada and 37 Sports Fan-Attic stores,
compared to 885 stores at the end of Fiscal 2009, including 50 stores in Canada.
Hat World Group earnings from operations for Fiscal 2010 increased 20.1% to $44.0 million compared to $36.7 million
for Fiscal 2009. The increase in operating income was primarily due to increased net sales and decreased expenses
as a percentage of net sales primarily reflecting leverage from positive comparable store sales.
JoHnSTon & MurPHY grouP
d o L L A r S I n T H o u S A n d S
N e t s a l e s
E a r n i n g s f r o m o p e r a t i o n s
O p e r a t i n g m a r g i n
F I S C A L Y e A r e n d e d
2 0 1 0
2 0 0 9
$ 1 6 6 , 0 7 9 $ 1 7 7 , 9 6 3
5 , 4 8 4 $ 1 0 , 0 6 9
$
5 . 7 %
3 . 3 %
P e r C e n T
C H A n g e
( 6 . 7 ) %
( 4 5 . 5 ) %
Johnston & Murphy Group net sales decreased 6.7% to $166.1 million for Fiscal 2010 from $178.0 million for Fiscal
2009, reflecting primarily an 8% decrease in comparable store sales and an 11% decrease in Johnston & Murphy
wholesale sales, partially offset by a 3% increase in average stores operated for Johnston & Murphy retail operations.
Unit sales for the Johnston & Murphy wholesale business decreased 2% in Fiscal 2010 and the average price per pair
of shoes decreased 10% for the same period. Retail operations accounted for 75.4% of Johnston & Murphy Group
sales in Fiscal 2010, up from 74.2% in Fiscal 2009. The comparable store sales decrease in Fiscal 2010 reflects a 7%
decrease in footwear unit comparable sales and a 4% decrease in average price per pair of shoes, primarily due to
changes in product mix. The store count for Johnston & Murphy retail operations at the end of Fiscal 2010 included
160 Johnston & Murphy shops and factory stores compared to 157 Johnston & Murphy shops and factory stores at
the end of Fiscal 2009.
Johnston & Murphy earnings from operations for Fiscal 2010 decreased 45.5% to $5.5 million from $10.1 million for
Fiscal 2009, primarily due to decreased net sales, decreased gross margin as a percentage of net sales, reflecting
changes in product mix and lower full priced wholesale sales, and increased expenses as a percentage of net sales,
reflecting negative leverage from the decrease in comparable store sales.
LICenSed BrAndS
d o L L A r S I n T H o u S A n d S
N e t s a l e s
E a r n i n g s f r o m o p e r a t i o n s
O p e r a t i n g m a r g i n
F I S C A L Y e A r e n d e d P e r C e n T
2 0 1 0
2 0 0 9
$ 9 3 , 1 9 4 $ 9 6 , 5 6 1
$ 1 2 , 3 7 2 $ 1 1 , 9 2 5
1 2 . 3 %
1 3 . 3 %
C H A n g e
( 3 . 5 ) %
3 . 7 %
Licensed Brands’ net sales decreased 3.5% to $93.2 million for Fiscal 2010 from $96.6 million for Fiscal 2009. The
sales decrease reflects a 5% decrease in sales of Dockers Footwear offset by increased sales from a new line of
footwear introduced in the third quarter last year that the Company is sourcing under a different brand with limited
distribution. Unit sales for Dockers Footwear decreased 1% for Fiscal 2010 and the average price per pair of shoes
decreased 3% for the same period.
Licensed Brands’ earnings from operations for Fiscal 2010 increased 3.7%, from $11.9 million for Fiscal 2009 to $12.4
million, primarily due to increased gross margin as a percentage of net sales, reflecting decreased product costs and
changes in product mix.
30
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
Genesco inc. AND SUBSIDIARIES
c o r p o r aT e , i n T e r e s T e x p e n s e s a n d o T h e r c h a r G e s
Corporate and other expense for Fiscal 2010 was $46.7 million compared to income of $157.6 million for Fiscal
2009. Corporate expense in Fiscal 2010 included $13.5 million in restructuring and other charges, primarily for retail
store asset impairments and lease terminations offset by other legal matters. Corporate expense for Fiscal 2010
also included $5.5 million for the loss on early retirement of debt. Corporate and other costs of sales for Fiscal 2010
included $0.1 million in excess markdowns related to lease terminations. Corporate income in Fiscal 2009 included a
$204.1 million gain from the settlement of merger-related litigation partially offset by $7.7 million in restructuring and
other charges, primarily for retail store asset impairments, lease terminations and other legal matters offset by a gain
on a lease termination transaction and $8.0 million in merger-related expenses. Corporate and other costs of sales for
Fiscal 2009 included $0.2 million in excess markdowns related to lease terminations.
Interest expense decreased 52.0% from $9.2 million in Fiscal 2009 to $4.4 million in Fiscal 2010, due to reduced
interest expense on the Company’s 4 1/8% Debentures as a result of retiring $86.2 million in aggregate principal
amount of the Debentures during Fiscal 2010. The application of the updated Debt Topic to the Codification resulted
in the recognition of additional pretax non-cash interest expense totaling $1.4 million for Fiscal 2010, compared to $3.1
million for Fiscal 2009. Interest income decreased 95.7% to $14,000 from $0.3 million for Fiscal 2009.
r e s u l t s o f o p e r a t i o n s – F i s c a l 2 0 0 9 C o m p a r e d t o F i s c a l 2 0 0 8
The Company’s net sales for Fiscal 2009 increased 3.3% to $1.55 billion from $1.50 billion in Fiscal 2008. The increase
in net sales was a result of a higher number of stores in operation and an increase in comparable store sales in the
Journeys Group and Hat World Group and increased Licensed Brands sales, offset by lower sales in the Underground
Station Group stores, reflecting fewer stores in operation and flat comparable store sales, and Johnston & Murphy
Group, reflecting generally challenging economic conditions and a difficult retail environment. Gross margin increased
3.8% to $780.0 million in Fiscal 2009 from $751.2 million in Fiscal 2008 and increased as a percentage of net sales from
50.0% to 50.3%. Selling and administrative expenses in Fiscal 2009 increased 2.5% from Fiscal 2008 but decreased
as a percentage of net sales from 46.6% to 46.2%, primarily as a result of lower merger-related expenses. Expenses
in Fiscal 2009 included $8.0 million of merger-related litigation expenses and Fiscal 2008 included $27.6 million in
merger-related litigation expenses. The Company records buying and merchandising and occupancy costs in selling
and administrative expense. Because the Company does not include these costs in cost of sales, the Company’s
gross margin may not be comparable to other retailers that include these costs in the calculation of gross margin.
Explanations of the changes in results of operations are provided by business segment in discussions following these
introductory paragraphs.
Pretax earnings for Fiscal 2009 were $250.7 million compared to $29.9 million for Fiscal 2008. Pretax earnings for Fiscal
2009 included a gain of $204.1 million from the settlement of merger-related litigation with The Finish Line and UBS and
restructuring and other charges of $7.7 million including $8.6 million for retail store asset impairments, $1.6 million for
lease terminations and $1.1 million for other legal matters offset by a $3.8 million gain on a lease termination transaction.
Also included in pretax earnings was $0.2 million in excess markdowns related to the store lease terminations which is
reflected in cost of sales on the Consolidated Statements of Operations. Pretax earnings for Fiscal 2009 also included
$8.0 million in merger-related expenses. Pretax earnings for Fiscal 2008 included restructuring and other charges of
$10.6 million, including $8.7 million of charges for asset impairments and $1.5 million for lease terminations, offset
by $0.5 million in excise tax refunds and an antitrust settlement. Also included in pretax earnings was $0.9 million
in excess markdowns related to the Underground Station Group store lease terminations which is reflected in cost
of sales on the Consolidated Statements of Operations. Pretax earnings for Fiscal 2008 also included $27.6 million
in expenses relating to the merger agreement with The Finish Line and a $0.5 million gain from insurance proceeds
relating to Hurricane Katrina.
Net earnings for Fiscal 2009 were $150.8 million ($6.49 diluted earnings per share) compared to $5.2 million ($0.22
diluted earnings per share) for Fiscal 2008. Net earnings for Fiscal 2009 includes $5.5 million ($0.23 diluted earnings
per share) charge to earnings (net of tax), including $5.7 million primarily for anticipated costs of environmental
remedial alternatives related to former facilities operated by the Company offset by a $0.2 million gain for excess
provisions to prior discontinued operations. Net earnings for Fiscal 2008 included $1.6 million ($0.07 diluted earnings
31
Genesco inc. AND SUBSIDIARIES
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
per share) charge to earnings (net of tax), including $1.8 million primarily for anticipated costs of environmental remedial
alternatives related to former facilities operated by the Company offset by a $0.2 million gain for excess provisions to
prior discontinued operations. The Company recorded an effective federal income tax rate of 37.7% for Fiscal 2009
compared to 77.4% for Fiscal 2008. The variance in the effective tax rate for Fiscal 2009 compared to Fiscal 2008 is
primarily attributable to transaction costs incurred in the prior period that were deductible in the later period, as well
as to issues related to the settlement of merger-related litigation. See Notes 11 and 15 to the Consolidated Financial
Statements for additional information.
JourneYS grouP
d o L L A r S I n T H o u S A n d S
N e t s a l e s
E a r n i n g s f r o m o p e r a t i o n s
O p e r a t i n g m a r g i n
F I S C A L Y e A r e n d e d
P e r C e n T
2 0 0 9
2 0 0 8
$ 7 6 0 , 0 0 8 $ 7 1 3 , 3 6 6
$ 4 9 , 0 5 0 $ 5 1 , 0 9 7
7 . 2 %
6 . 5 %
C H A n g e
6 . 5 %
( 4 . 0 ) %
Net sales from Journeys Group increased 6.5% to $760.0 million for Fiscal 2009 from $713.4 million for Fiscal 2008.
The increase reflects primarily a 9% increase in average Journeys stores operated and a 1% increase in comparable
store sales. The comparable store sales increase reflects a 1% increase in footwear unit comparable sales and a 1%
increase in average price per pair of shoes reflecting changes in product mix. Total unit sales increased 7% during the
same period. The store count for Journeys Group was 1,012 stores at the end of Fiscal 2009, including 141 Journeys
Kidz stores and 55 Shi by Journeys stores, compared to 967 Journeys Group stores at the end of Fiscal 2008, including
115 Journeys Kidz stores and 47 Shi by Journeys stores.
Journeys Group earnings from operations for Fiscal 2009 decreased 4.0% to $49.1 million, compared to $51.1 million
for Fiscal 2008. The decrease was primarily attributable to increased expenses as a percentage of net sales, reflecting
increased rent from new stores, lease renewals and relocation from smaller, volume constrained locations to bigger
stores, as well as increased bonus accruals based on improved performance for bonus purposes.
underground STATIon grouP
d o L L A r S I n T H o u S A n d S
N e t s a l e s
L o s s f r o m o p e r a t i o n s
O p e r a t i n g m a r g i n
F I S C A L Y e A r e n d e d
2 0 0 9
$ 1 1 0 , 9 0 2
$ ( 5 , 6 6 0 ) $ ( 7 , 7 1 0 )
2 0 0 8
$ 124,002
( 5 . 1 ) %
( 6 . 2 ) %
P e r C e n T
C H A n g e
( 1 0 . 6 ) %
2 6 . 6 %
Net sales from the Underground Station Group decreased 10.6% to $110.9 million for Fiscal 2009 from $124.0 million
for Fiscal 2008. The decrease reflects a 14% decrease in average Underground Station Group stores operated related
to the Company’s strategy of closing Jarman stores and the plan announced in May 2007 to close or convert up to
49 Underground Station Group stores. Unit sales decreased 7% during Fiscal 2009. Comparable store sales were
flat for Underground Station Group for the year. The flat comparable store sales reflect a 6% increase in footwear unit
comparable sales, offset by a 4% decrease in the average price per pair of shoes, reflecting changes in product mix in
part due to more women’s and children’s products, and increased markdowns. Underground Station Group operated
180 stores at the end of Fiscal 2009. The Company had operated 192 Underground Station Group stores at the end of
Fiscal 2008. The Company plans to continue to shorten the average lease life of the Underground Station stores, close
certain underperforming stores as the opportunity presents itself, and attempt to secure rent relief on other locations
while it assesses the future prospects for the chain.
Underground Station Group loss from operations for Fiscal 2009 improved to $(5.7) million compared to $(7.7) million
for the same period last year. The improvement was due to decreased expenses as a percentage of net sales from
store closings and actions taken for improved expense control.
32
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
Genesco inc. AND SUBSIDIARIES
HAT WorLd grouP
d o L L A r S I n T H o u S A n d S
N e t s a l e s
E a r n i n g s f r o m o p e r a t i o n s
O p e r a t i n g m a r g i n
F I S C A L Y e A r e n d e d
P e r C e n T
2 0 0 9
2 0 0 8
$ 4 0 5 , 4 4 6 $ 3 7 8 , 9 1 3
$ 3 6 , 6 7 0 $ 3 1 , 9 8 7
9 . 0 %
8 . 4 %
C H A n g e
7 . 0 %
1 4 . 6 %
Net sales from the Hat World Group increased 7.0% to $405.4 million for Fiscal 2009 from $378.9 million for Fiscal 2008.
The increase reflects primarily a 5% increase in average stores operated and a 2% increase in comparable store sales.
Hat World Group operated 885 stores at the end of Fiscal 2009, including 50 stores in Canada, compared to 862 stores
at the end of Fiscal 2008, including 34 stores in Canada.
Hat World Group earnings from operations for Fiscal 2009 increased 14.6% to $36.7 million compared to $32.0 million
for Fiscal 2008. The increase in operating income was primarily due to increased net sales and increased gross
margin as a percentage of net sales primarily reflecting fewer off-priced sales, increased vendor discounts and growth
in higher margin areas.
JoHnSTon & MurPHY grouP
d o L L A r S I n T H o u S A n d S
N e t s a l e s
E a r n i n g s f r o m o p e r a t i o n s
O p e r a t i n g m a r g i n
F I S C A L Y e A r e n d e d
2 0 0 9
2 0 0 8
$ 1 7 7 , 9 6 3 $ 1 9 2 , 4 8 7
$ 1 0 , 0 6 9 $ 1 9 , 8 0 7
1 0 . 3 %
5 . 7 %
P e r C e n T
C H A n g e
( 7 . 5 ) %
( 4 9 . 2 ) %
Johnston & Murphy Group net sales decreased 7.5% to $178.0 million for Fiscal 2009 from $192.5 million for
Fiscal 2008, reflecting primarily a 10% decrease in comparable store sales and a 7% decrease in Johnston & Murphy
wholesale sales, partially offset by a 2% increase in average stores operated for Johnston & Murphy retail operations. Unit
sales for the Johnston & Murphy wholesale business decreased 11% in Fiscal 2009, while the average price per pair of
shoes increased 3% for the same period. Retail operations accounted for 74.2% of Johnston & Murphy Group sales in
Fiscal 2009, unchanged from Fiscal 2008. The comparable store sales decrease in Fiscal 2009 reflects a 12% decrease in
footwear unit comparable sales and a 1% decrease in average price per pair of shoes, primarily due to changes in product
mix and increased markdowns. The store count for Johnston & Murphy retail operations at the end of Fiscal 2009 included
157 Johnston & Murphy shops and factory stores compared to 154 Johnston & Murphy shops and factory stores at the
end of Fiscal 2008.
Johnston & Murphy earnings from operations for Fiscal 2009 decreased 49.2% to $10.1 million from $19.8 million for
Fiscal 2008, primarily due to decreased net sales, decreased gross margin as a percentage of net sales, reflecting changes
in product mix and increased markdowns, and increased expenses as a percentage of net sales, reflecting negative
leverage from the decrease in comparable store sales.
LICenSed BrAndS
d o L L A r S I n T H o u S A n d S
N e t s a l e s
E a r n i n g s f r o m o p e r a t i o n s
O p e r a t i n g m a r g i n
F I S C A L Y e A r e n d e d
P e r C e n T
2 0 0 9
2 0 0 8
$ 9 6 , 5 6 1 $ 9 2 , 7 0 6
$ 1 1 , 9 2 5 $ 1 0 , 9 7 6
1 1 . 8 %
1 2 . 3 %
C H A n g e
4 . 2 %
8 . 6 %
Licensed Brands’ net sales increased 4.2% to $96.6 million for Fiscal 2009 from $92.7 million for Fiscal 2008. The sales
increase reflects a 5% increase in sales of Dockers Footwear. Unit sales for Dockers Footwear increased 4% for Fiscal
2009 and the average price per pair of shoes increased 1% for the same period.
Licensed Brands’ earnings from operations for Fiscal 2009 increased 8.6%, from $11.0 million for Fiscal 2008 to $11.9
million, primarily due to increased net sales and decreased expenses as a percentage of net sales.
33
Genesco inc. AND SUBSIDIARIES
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
c o r p o r aT e , i n T e r e s T e x p e n s e s a n d o T h e r c h a r G e s
Corporate and other for Fiscal 2009 had income of $157.6 million compared to expenses of $64.3 million for Fiscal
2008. Corporate income in Fiscal 2009 included a $204.1 million gain from the settlement of merger-related litigation
partially offset by $7.7 million in restructuring and other charges, primarily for retail store asset impairments, lease
terminations and other legal matters offset by a gain on a lease termination transaction and $8.0 million in merger-
related expenses. Corporate and other costs of sales for Fiscal 2009 included $0.2 million in excess markdowns
related to lease terminations. Corporate expenses in Fiscal 2008 included $27.6 million in merger-related expenses
and a $0.5 million gain from insurance proceeds relating to Hurricane Katrina. Corporate and other expenses for
Fiscal 2008 also included $9.7 million of restructuring and other charges, primarily for asset impairments and lease
terminations, offset by excise tax refunds and an antitrust settlement. Corporate and other cost of sales for Fiscal 2008
included $0.9 million in excess markdowns related to Underground Station Group lease terminations.
Interest expense decreased 23.3% from $12.0 million in Fiscal 2008 to $9.2 million in Fiscal 2009, due to the cash
received from the merger-related litigation settlement and improved operating cash flow, which decreased average
revolver borrowings from $65.9 million in Fiscal 2008 to $27.7 million in Fiscal 2009.
Interest income increased from $0.1 million in Fiscal 2008 to $0.3 million in Fiscal 2009, due to the increase in average
short-term investments as a result of the proceeds from the settlement of merger-related litigation.
L i q u i d i t y a n d C a p i t a l r e s o u r c e s
The following table sets forth certain financial data at the dates indicated.
d o L L A r S I n M I L L I o n S
C a s h a n d c a s h e q u i v a l e n t s
W o r k i n g c a p i t a l
L o n g - t e r m d e b t
W o r k i n G c a p i Ta l
j a n . 3 0
J A N . 3 1
F E B . 2
2 0 1 0
$ 82.1
$ 280.4
-0-
$
2 0 0 9
$ 1 7 . 7
$ 2 5 9 . 1
$ 1 1 3 . 7
2 0 0 8
$ 1 7 . 7
$ 2 3 8 . 1
$ 1 4 7 . 3
The Company’s business is seasonal, with the Company’s investment in inventory and accounts receivable normally
reaching peaks in the spring and fall of each year. Historically, cash flow from operations has been generated principally
in the fourth quarter of each fiscal year.
Cash provided by operating activities was $142.1 million in Fiscal 2010 compared to $179.1 million in Fiscal 2009. The
$37.0 million decrease in cash flow from operating activities from last year reflects primarily the receipt of $175.0 million
of cash proceeds of the merger-related litigation settlement in Fiscal 2009, offset by an increase in cash flow from
changes in inventory, accounts payable, other accrued liabilities and prepaids and other current assets of $27.4 million,
$19.5 million, $19.4 million and $16.2 million, respectively. The $27.4 million increase in cash flow from inventory
reflected efforts to reduce inventory in order to align inventory growth with sales growth, especially in the Johnston &
Murphy Group. The $19.5 million increase in cash flow from accounts payable reflected changes in buying patterns,
including actions taken to reduce inventory in the prior year, and payment terms negotiated with individual vendors. The
$19.4 million increase in cash flow from other accrued liabilities reflected Fiscal 2009 reduction in accrued professional
fees related to the terminated merger agreement and reduction in income taxes plus a Fiscal 2010 additional accrual
related to environmental insurance. The $16.2 million increase in cash flow from prepaids and other current assets was
due to decreased prepaid income taxes compared to Fiscal 2009.
The $24.0 million decrease in inventories at January 30, 2010 from January 31, 2009 levels reflects a decrease in
inventory, primarily wholesale, due to efforts to align inventory growth with sales growth and increased wholesale
inventory last year due to timing of Chinese New Year.
Accounts receivable at January 30, 2010 increased $2.3 million compared to January 31, 2009, due primarily to
increased wholesale sales in the fourth quarter of Fiscal 2010 which includes sales of the newly acquired Great Plains
Sports team dealer business and slower overall accounts receivable turn.
34
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
Genesco inc. AND SUBSIDIARIES
Cash provided by operating activities was $179.1 million in Fiscal 2009 compared to $23.9 million in Fiscal 2008. The
$155.2 million increase in cash flow from operating activities from Fiscal 2008 reflects primarily the receipt of $175.0
million of cash proceeds of the merger-related litigation settlement and changes in inventory of $36.2 million, offset
by a decrease in cash flow from changes in other accrued liabilities, prepaids and other current assets and accounts
payable of $16.8 million, $10.9 million and $7.6 million, respectively. The $36.2 million increase in cash flow from
inventory reflected efforts to reduce inventory in order to align inventory growth with sales growth. The $16.8 million
decrease in cash flow from other accrued liabilities was due to a reduction in accrued professional fees related to the
terminated merger agreement and a reduction in accrued income taxes due to the Company being in a prepaid income
tax position at the end of the year, offset by increased bonus accruals. The $10.9 million decrease in cash flow from
prepaids and other current assets was due to increased prepaid income taxes. The $7.6 million decrease in cash flow
from accounts payable reflected changes in buying patterns, including actions taken to reduce inventory, and payment
terms negotiated with individual vendors.
The $3.3 million increase in inventories at January 31, 2009 from February 2, 2008 levels reflects an increase in
wholesale inventory due to an inability to react quickly to the economic conditions as well as increases in inventory to
support spring shipments, offset by a decrease in retail inventory due to efforts to align inventory growth with sales
growth offset by inventory purchased to support the net increase of 59 stores in Fiscal 2009.
Accounts receivable at January 31, 2009 decreased $2.2 million compared to February 2, 2008, due primarily to
decreased wholesale sales in the fourth quarter of Fiscal 2009 and lower tenant allowance receivables from the slow
down in store openings.
Cash provided (used) due to changes in accounts payable and accrued liabilities are as follows:
F I S C A L Y e A r e n d e d
I n T H o u S A n d S
A c c o u n t s p a y a b l e
A c c r u e d l i a b i l i t i e s
2 0 1 0
2 0 0 9
$ 1 1 , 4 4 1 $ ( 8 , 0 7 1 ) $ ( 4 3 0 )
( 9 2 3 )
( 1 7 , 6 9 4 )
1 , 6 6 1
2 0 0 8
$ 1 3 , 1 0 2 $ ( 2 5 , 7 6 5 ) $ ( 1 , 3 5 3 )
The fluctuations in cash provided (used) due to changes in accounts payable for Fiscal 2010 from Fiscal 2009 and for
Fiscal 2009 from Fiscal 2008 are due to changes in buying patterns, including actions taken to reduce inventory in the
prior year, and payment terms negotiated with individual vendors. The change in cash provided (used) due to changes
in accrued liabilities for Fiscal 2010 from Fiscal 2009 was due primarily to Fiscal 2009 reduction in accrued professional
fees related to the terminated merger agreement and reduction in income taxes plus a Fiscal 2010 additional accrual
related to environmental insurance, and the change in accrued liabilities for Fiscal 2009 from Fiscal 2008 was due
primarily to a reduction in accrued professional fees and expenses related to the terminated merger agreement and a
reduction in accrued taxes due to the Company being in a prepaid tax position, offset by higher bonus accruals.
The Company has a revolving credit facility (the “Credit Facility”) entered into on December 1, 2006, in the aggregate
principal amount of $200.0 million, with a $20.0 million swingline loan sublimit and a $70.0 million sublimit for the
issuance of standby letters of credit, and has a five-year term. Revolving credit borrowings averaged $15.4 million
during Fiscal 2010 and $27.7 million during Fiscal 2009, as cash generated from operations primarily funded seasonal
working capital requirements and capital expenditures for Fiscal 2010.
35
Genesco inc. AND SUBSIDIARIES
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
c o n T r a c T u a l o B l i G aT i o n s
The following tables set forth aggregate contractual obligations and commitments as of January 30, 2010.
PAY M e n T S d u e BY P e r I o d
L e S S T H A n 1
1– 3
3 – 5
T H A n 5
M o r e
I n T H o u S A n d S
Capital Lease Obligations
Operating Lease Obligations
Purchase Obligations(1)
Other Long-Term Liabilities
Total Contractual obligations(2)
c o m m e r c i a l c o m m i T m e n T s
$
Y e A r
T o TA L
Y e A r S
99 $
141 $
Y e A r S
13
264,327
-0-
550
$ 1,268,791 $ 458,360 $ 298,995 $ 246,546 $ 264,890
246,174
-0-
369
298,572
-0-
397
167,739
290,324
198
976,812
290,324
1,514
26 $
3 $
Y e A r S
A M o u n T o F C o M M I T M e n T e x P I r AT I o n P e r P e r I o d
T o TA L A M o u n T S L e S S T H A n 1
1– 3
3 – 5
M o r e
T H A n 5
Y e A r S
I n T H o u S A n d S
Letters of Credit
Total Commercial Commitments
C o M M I T T e d
$
$
10,995 $
10,995 $
Y e A r
Y e A r S
Y e A r S
10,995 $
10,995 $
-0- $
-0- $
-0- $
-0- $
-0-
-0-
(1) Open purchase orders for inventory.
(2) Excludes unrecognized tax benefits of $17.2 million due to their uncertain nature in timing of payments.
c a p i Ta l e x p e n d i T u r e s
Capital expenditures were $33.8 million, $49.4 million and $80.7 million for Fiscal 2010, 2009 and 2008, respectively. The
$15.6 million decrease in Fiscal 2010 capital expenditures as compared to Fiscal 2009 resulted primarily from the decrease
in retail store capital expenditures due to 61 new store openings in Fiscal 2010, excluding 38 acquired stores, compared
to 102 new store openings in Fiscal 2009 and a lower amount of full major renovations. The $31.3 million decrease in
Fiscal 2009 capital expenditures as compared to Fiscal 2008 resulted primarily from the decrease in retail store capital
expenditures due to 102 new store openings in Fiscal 2009 compared to 229 new store openings in Fiscal 2008.
Total capital expenditures in Fiscal 2011 are expected to be approximately $45.0 million. These include retail capital
expenditures of approximately $33.2 million to open approximately 12 Journeys stores, three Journeys Kidz stores, nine
Johnston & Murphy shops and factory stores and 45 Hat World Group stores including 15 stores in Canada and five Sports
Fan-Attic stores and to complete approximately 171 major store renovations. Due to current economic conditions, the
Company intends to be more selective with respect to new store locations. The Company will continue to open stores
at a slower pace in 2011. The planned amount of capital expenditures in Fiscal 2011 for wholesale operations and other
purposes is approximately $11.8 million, including approximately $6.2 million for new systems to improve customer service
and support the Company’s growth.
f u T u r e c a p i Ta l n e e d s
The Company expects that cash on hand and cash provided by operations will be sufficient to support seasonal working
capital requirements and capital expenditures, although the Company may borrow under its Credit Facility from time to time
to support seasonal working capital requirements during Fiscal 2011. The approximately $9.4 million of costs associated
with discontinued operations that are expected to be paid during the next twelve months are expected to be funded from
cash on hand and borrowings under the Credit Facility during Fiscal 2011.
There were $11.0 million of letters of credit outstanding and no revolver borrowings outstanding under the Credit Facility
at January 30, 2010. Net availability under the facility was $180.0 million. The Company is not required to comply with
any financial covenants under the facility unless Adjusted Excess Availability (as defined in the Amended and Restated
Credit Agreement) is less than 10% of the total commitments under the credit facility (currently $20.0 million). If and during
such time as Adjusted Excess Availability is less than such amount, the credit facility requires the Company to meet a
minimum fixed charge coverage ratio (EBITDA less capital expenditures less cash taxes divided by cash interest expense
and scheduled payments of principal indebtedness) of 1.0 to 1.0. Adjusted Excess Availability was $180.0 million at
36
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
Genesco inc. AND SUBSIDIARIES
January 30, 2010. Because Adjusted Excess Availability exceeded $20.0 million, the Company was not required to comply
with this financial covenant at January 30, 2010.
The Credit Facility prohibits the payment of dividends and other restricted payments (including stock repurchases) unless
after such dividend or restricted payment (i) availability is between $30.0 million and $50.0 million, the fixed charge coverage
is greater than 1.0 to 1.0 or (ii) availability under the credit facility exceeds $50.0 million. The Company’s management
does not expect availability under the Credit Facility to fall below $50.0 million during Fiscal 2011.
The aggregate of annual dividend requirements on the Company’s Subordinated Serial Preferred Stock, $2.30 Series 1,
$4.75 Series 3 and $4.75 Series 4, and on its $1.50 Subordinated Cumulative Preferred Stock is $198,000.
c o mm on sT ock repur c h a s e s
In March 2008, the board authorized up to $100.0 million in stock repurchases primarily funded with the after-tax cash
proceeds of the settlement of the merger-related litigation with The Finish Line and UBS. See Notes 3 and 15 to the
Consolidated Financial Statements. The Company did not repurchase any shares during Fiscal 2008. The Company
repurchased 4.0 million shares at a cost of $90.9 million during Fiscal 2009. The Company repurchased 85,000 shares at a
cost of $2.0 million during Fiscal 2010. In total, the Company has repurchased 12.2 million shares at a cost of $196.3 million
from all authorizations as of January 30, 2010. In February 2010, the board increased the total repurchase authorization to
$35.0 million.
e n v i r o n m e n t a l a n d o t h e r c o n t i n g e n c i e s
The Company is subject to certain loss contingencies related to environmental proceedings and other legal matters,
including those disclosed in Note 15 to the Company’s Consolidated Financial Statements. The Company has made
accruals for certain of these contingencies, including approximately $0.8 million reflected in Fiscal 2010, $9.4 million
reflected in Fiscal 2009 and $2.9 million reflected in Fiscal 2008. The Company monitors these matters on an ongoing
basis and, on a quarterly basis, management reviews the Company’s reserves and accruals in relation to each of them,
adjusting provisions as management deems necessary in view of changes in available information. Changes in estimates
of liability are reported in the periods when they occur. Consequently, management believes that its reserve in relation
to each proceeding is a reasonable estimate of the probable loss connected to the proceeding, or in cases in which no
reasonable estimate is possible, the minimum amount in the range of estimated losses, based upon its analysis of the facts
and circumstances as of the close of the most recent fiscal quarter. However, because of uncertainties and risks inherent
in litigation generally and in environmental proceedings in particular, there can be no assurance that future developments
will not require additional reserves to be set aside, that some or all reserves may not be adequate or that the amounts of
any such additional reserves or any such inadequacy will not have a material adverse effect upon the Company’s financial
condition or results of operations.
f i n a n c i a l m a r k e t r i s k
The following discusses the Company’s exposure to financial market risk related to changes in interest rates and foreign
currency exchange rates.
O U T S TA N D I N G D E B T O F T H E C O M PA N Y – The Company does not have any outstanding debt as of January 30, 2010.
C A S H A N D C A S H E Q U I V A L E N T S – The Company’s cash and cash equivalent balances are invested in financial
instruments with original maturities of three months or less. The Company did not have significant exposure to changing
interest rates on invested cash at January 30, 2010. As a result, the Company considers the interest rate market risk
implicit in these investments at January 30, 2010 to be low.
F O R E I G N C U R R E N C Y E x C H A N G E R AT E R I S K - Most purchases by the Company from foreign sources are denominated
in U.S. dollars. To the extent that import transactions are denominated in other currencies, it is the Company’s practice to
hedge its risks through the purchase of forward foreign exchange contracts when the purchases are material. At January
30, 2010, the Company had $0.6 million of forward foreign exchange contracts for Euro. The Company’s policy is not
to speculate in derivative instruments for profit on the exchange rate price fluctuation and it does not hold any derivative
instruments for trading purposes. Derivative instruments used as hedges must be effective at reducing the risk associated
with the exposure being hedged and must be designated as a hedge at the inception of the contract. The unrealized loss
37
Genesco inc. AND SUBSIDIARIES
m a n a G e m e n T ’ s d i s c u s s i o n a n d a n a lY s i s O F F I N A N C I A L C O N D I T I O N A N D R E S U LT S O F O P E R AT I O N S
on contracts outstanding at January 30, 2010 was less than $0.1 million based on current spot rates. As of January 30,
2010, a 10% adverse change in foreign currency exchange rates from market rates would decrease the fair value of the
contracts by approximately $0.1 million.
A C C O U N T S R E C E I V A B L E – The Company’s accounts receivable balance at January 30, 2010 is primarily concentrated
in two of its wholesale businesses, which sell primarily to department stores and independent retailers across the United
States. One customer accounted for 20% and no other customer accounted for more than 10% of the Company’s trade
receivables balance as of January 30, 2010. The Company monitors the credit quality of its customers and establishes
an allowance for doubtful accounts based upon factors surrounding credit risk of specific customers, historical trends and
other information, as well as customer specific factors; however, credit risk is affected by conditions or occurrences within
the economy and the retail industry, as well as company-specific information.
S U M M A R Y – Based on the Company’s overall market interest rate and foreign currency rate exposure at January 30, 2010,
the Company believes that the effect, if any, of reasonably possible near-term changes in interest rates or foreign currency
exchange rates on the Company’s consolidated financial position, results of operations or cash flows for Fiscal 2011 would
not be material.
new accounting principles
In June 2009, the FASB established the FASB Accounting Standards Codification (the “Codification”) as the source of
authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation
of financial statements in conformity with U.S. GAAP. The Codification does not change current U.S. GAAP, but is intended
to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic
in one place. The Codification is effective for interim and annual periods ending after September 15, 2009, and as of the
effective date, all existing accounting standard documents will be superseded. The Company adopted the Codification
effective for its third quarter ended October 31, 2009, and accordingly, all subsequent public filings will reference the
Codification as the sole source of authoritative literature.
In December 2008, the FASB updated the Compensation – Retirement Benefits Topic of the Codification to require more
detailed disclosures about the assets of a defined benefit pension or other postretirement plan and is effective for fiscal
years ending after December 15, 2009 (Fiscal 2010 for the Company). The Company adopted this updated guidance as
of January 30, 2010 and it did not have a significant impact on its results of operations or financial position. See Note 12
to the Consolidated Financial Statements.
inflation
The Company does not believe inflation has had a material impact on sales or operating results during periods covered in
this discussion.
38
f i n a n c i a l s u m m a r Y
Genesco inc. AND SUBSIDIARIES
f is c al Year s 20 06 Thr ouGh 2 0 09 have B een resTaTed To reflecT adjusTmenTs ThaT are furTher discus sed in
no T es 1 a nd 2 To The consol idaTed financial sTaTemenTs.
In THouSAndS exCePT Per CoMMon SHAre dATA,
FInAnCIAL STATISTICS And oTHer dATA
r e s u l t s o f o p e r a t i o n s d a t a
Net Sales
Depreciation
Earnings from operations
Earnings from continuing operations
before income taxes
Earnings from continuing operations
(Provision for) earnings from
discontinued operations, net
Net earnings
P e r C o m m o n S h a r e d a t a
Earnings from continuing operations
Basic
Diluted
Discontinued operations
Basic
Diluted
Net earnings
Basic
Diluted
B a l a n c e S h e e t d a t a
Total assets
Long-term debt
Non-redeemable preferred stock
Common shareholders’ equity
Capital expenditures
F i n a n c i a l S t a t i s t i c s
Earnings from operations
2010
2009
2008
2007
2006
FISCAL YeAr end
$ 1,574,352 $ 1,551,562 $ 1,502,119 $ 1,460,478 $ 1,283,876
34,622
109,835
46,757
259,626
40,306
117,849
47,033
60,422
45,114
41,821
$
$
$
50,488
29,086
250,714
156,219
29,920
6,774
108,535
66,713
100,101
61,190
(273)
28,813 $
(5,463)
150,756 $
(1,603)
5,171 $
(601)
66,112 $
60
61,250
1.35 $
1.31
8.11 $
6.72
.29 $
.29
2.93 $
2.61
(.02)
(.01)
1.33
1.30
(.28)
(.23)
7.83
6.49
(.07)
(.07)
.22
.22
(.02)
(.02)
2.91
2.59
2.67
2.38
.00
.00
2.67
2.38
863,652 $
-0-
5,220
577,093
33,825
816,063 $
113,735
5,203
444,552
49,420
801,685 $
147,271
5,338
420,778
80,662
729,048 $
98,390
6,602
405,040
73,287
685,697
92,711
6,695
350,005
56,946
as a percent of net sales
3.8%
16.7%
2.8%
8.1%
8.6%
Book value per share (common shareholders’ equity
divided by common shares outstanding)
Working capital (in thousands)
Current ratio
Percent long-term debt to total capitalization
o t h e r d a t a ( e n d o f Ye a r )
Number of retail outlets*
Number of employees
$
$
23.97 $
280,415 $
2.7
0.0%
23.10 $
259,137 $
2.9
20.2%
18.46 $
238,093 $
2.6
25.7%
17.81 $
200,330 $
2.5
19.3%
15.05
184,986
2.2
20.6%
2,276
13,925
2,234
13,775
2,175
13,950
2,009
12,750
1,773
11,100
* Includes 37 Sports Fan-Attic stores in Fiscal 2010 acquired November 3, 2009 and 49 Hat Shack stores in Fiscal 2007 acquired January 11, 2007. See Note 4
to the Consolidated Financial Statements.
Reflected in earnings from continuing operations for Fiscal 2009 was a $204.1 million gain on the settlement of merger-related litigation.
Reflected in earnings from continuing operations for Fiscal 2009 and 2008 were $8.0 million and $27.6 million, respectively, in merger-related costs and
litigation expenses. These expenses were deductible for tax purposes in Fiscal 2009. See Notes 3 and 15 to the Consolidated Financial Statements for
additional information regarding these charges.
Reflected in earnings from continuing operations for Fiscal 2010, 2009, 2008, 2007 and 2006 were restructuring and other charges of $13.4 million,
$7.5 million, $9.7 million, $1.1 million and $2.3 million, respectively. See Note 5 to the Consolidated Financial Statements for additional information regarding
these charges.
Long-term debt includes current obligations. During Fiscal 2010, the Company entered into separate exchange agreements whereby it acquired and retired all
$86.2 million in aggregate principal amount of its Debentures due June 15, 2023 in exchange for the issuance of 4,552,824 shares of its common stock. As
a result of the exchange agreements and conversions, the Company recognized a loss on the early retirement of debt of $5.5 million reflected in earnings from
continuing operations. In December 2006, the Company entered into an amended and restated credit agreement in the aggregate principal amount of
$200.0 million. See Note 8 to the Consolidated Financial Statements for additional information regarding the Company’s debt.
The Company has not paid dividends on its Common Stock since 1973. See Notes 8 and 10 to the Consolidated Financial Statements and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Future Capital Needs” for a description of
limitations on the Company’s ability to pay dividends.
39
Genesco inc. AND SUBSIDIARIES
m a n a G e m e n T ’ s r e s p o n s i B i l i T Y F O R F I N A N C I A L S TAT E M E N T S
Genesco inc. and consolidaTed suBsidiaries
The consolidated financial statements presented in this report are the responsibility of management and have been
prepared in conformity with U.S. generally accepted accounting principles. Some of the amounts included in the
financial information are necessarily based on the estimates and judgments of management, which are based on
currently available information and management’s view of current conditions and circumstances.
An independent registered public accounting firm audits the Company’s consolidated financial statements and the
effectiveness of internal control over financial reporting in accordance with the standards established by the Public
Company Accounting Oversight Board.
The audit committee of the board of directors, composed entirely of directors who are not employees of the Company,
meets regularly with management, internal audit and the independent registered public accounting firm to review
accounting, control, auditing and financial reporting matters. Internal audit and the independent auditors have full and
free access to the audit committee and meet (with and without management present) to discuss appropriate matters.
James S. Gulmi
Senior Vice President – Finance
Chief Financial Officer and Treasurer
Paul D. Williams
Vice President
Chief Accounting Officer
40
r e p o r T o f i n d e p e n d e n T r e G i s T e r e d p u B l i c a c c o u n T i n G f i r m
Genesco inc. AND SUBSIDIARIES
The Board of direcTors and shareholders
Genesco inc.
We have audited the accompanying consolidated balance sheets of Genesco Inc. and Subsidiaries (the “Company”) as
of January 30, 2010 and January 31, 2009, and the related consolidated statements of operations, shareholders’ equity
and cash flows for each of the three fiscal years in the period ended January 30, 2010. These financial statements
are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Genesco Inc. and Subsidiaries at January 30, 2010 and January 31, 2009, and the consolidated
results of its operations and its cash flows for each of the three fiscal years in the period ended January 30, 2010, in
conformity with U.S. generally accepted accounting principles.
As discussed in Notes 1 and 11 to the consolidated financial statements, in fiscal 2008 the Company changed its
method of accounting for income tax contingencies. As discussed in Note 2, the Company adopted the update to the
Debt Topic, specifically Debt with Conversion and Other Options, as of February 1, 2009.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the Company’s internal control over financial reporting as of January 30, 2010, based on criteria established
in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated March 31, 2010 expressed an unqualified opinion thereon.
Nashville, Tennessee
March 31, 2010
41
Genesco inc. AND SUBSIDIARIES
r e p o r T o f i n d e p e n d e n T r e G i s T e r e d p u B l i c a c c o u n T i n G f i r m
O N I N T E R N A L C O N T R O L O V E R F I N A N C I A L R E P O R T I N G
The Board of direcTors and shareholders
Genesco inc.
We have audited Genesco Inc.’s internal control over financial reporting as of January 30, 2010, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (the COSO criteria). Genesco Inc.’s management is responsible for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting
included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is
to express an opinion on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such
other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations
of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on
the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
In our opinion, Genesco Inc. maintained, in all material respects, effective internal control over financial reporting as of
January 30, 2010, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated balance sheets of Genesco Inc. as of January 30, 2010 and January 31, 2009, and the related
consolidated statements of operations, shareholders’ equity, and cash flows for each of the three fiscal years in the
period ended January 30, 2010 and our report dated March 31, 2010 expressed an unqualified opinion thereon.
Nashville, Tennessee
March 31, 2010
42
c o n s o l i d aT e d B a l a n c e s h e e T s
I n T H o u S A n d S , e xC e P T S H A r e A M o u n T S
A S S e T S
C u r r e n t A s s e t s
Cash and cash equivalents
Accounts receivable, net of allowances of $3,232 at January 30, 2010
and $3,052 at January 31, 2009
Inventories
Deferred income taxes
Prepaids and other current assets
To t a l c u r r e n t a s s e t s
Property and equipment:
Land
Buildings and building equipment
Computer hardware, software and equipment
Furniture and fixtures
Construction in progress
Improvements to leased property
Property and equipment, at cost
Accumulated depreciation
Property and equipment, net
Deferred income taxes
Goodwill
Trademarks
Other intangibles, net of accumulated amortization of
$8,795 at January 30, 2010 and $7,956 at January 31, 2009
Other noncurrent assets
Total assets
L I A B I L I T I e S A n d S H A r e H o L d e r S ’ e q u I T Y
C u r r e n t L i a b i l i t i e s
Acounts payable
Accrued employee compensation
Accrued other taxes
Accrued income taxes
Other accrued liabilities
Provision for discontinued operations
Total current liabilities
Long-term debt
Pension liability
Deferred rent and other long-term liabilities
Provision for discontinued operations
Total liabilities
Commitments and contingent liabilities
shareholders’ equity
Non-redeemable preferred stock
Common shareholders’ equity:
Common stock, $1 par value: Authorized: 80,000,000 shares
Issued/Outstanding: January 30, 2010 – 24,562,693/24,074,229
January 31, 2009 – 19,731,979/19,243,515
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Treasury shares, at cost
Total shareholders’ equity
Total liabilities and shareholders’ equity
The accompanying Notes are an integral part of these Consolidated Financial Statements.
43
Genesco inc. AND SUBSIDIARIES
A S o F F I S C A L Y e A r e n d
2010
2 0 0 9
$ 82,148
$ 17,672
27,217
290,974
17,314
32,419
23,744
306,078
15,083
35,542
450,072
398,119
4,863
17,992
86,239
101,923
3,196
277,624
491,837
4,863
17,990
79,255
99,954
7,044
274,613
483,719
(275,544)
(244,038)
216,293
13,545
118,995
52,799
3,670
8,278
239,681
5,302
111,680
51,455
2,376
7,450
$ 863,652
$ 816,063
$ 92,699
$ 73,143
15,043
15,780
11,570
-0-
40,979
9,366
169,657
-0-
20,402
85,232
6,048
11,254
634
28,727
9,444
138,982
113,735
25,968
81,499
6,124
281,339
366,308
5,220
5,203
24,563
146,981
452,210
(28,804)
(17,857)
582,313
19,732
49,780
423,595
(30,698)
(17,857)
449,755
$ 863,652
$ 816,063
FISCAL YeAr
2009
2010
2008
$ 1,574,352 $ 1,551,562 $ 1,502,119
750,904
699,692
778,482
722,087
771,580
716,931
-0-
13,361
60,422
5,518
(204,075)
7,500
259,626
-0-
4,430
(14)
4,416
50,488
21,402
29,086
(273)
28,813 $
1.35 $
(.02) $
1.33 $
1.31 $
(.01) $
1.30 $
9,234
(322)
8,912
250,714
94,495
156,219
(5,463)
150,756 $
8.11 $
(.28) $
7.83 $
6.72 $
(.23) $
6.49 $
-0-
9,702
41,821
-0-
12,045
(144)
11,901
29,920
23,146
6,774
(1,603)
5,171
.29
(.07)
.22
.29
(.07)
.22
$
$
$
$
$
$
$
Genesco inc. AND SUBSIDIARIES
c o n s o l i d aT e d s TaT e m e n T s o f o p e r aT i o n s
In THouSAndS, exCePT Per SHAre AMounTS
Net sales
Cost of sales
Selling and administrative expenses
Gain from settlement of merger-
related litigation
Restructuring and other, net
Earnings from operations
Loss on early retirement of debt
Interest expense, net:
Interest expense
Interest income
Total interest expense, net
Earnings from continuing operations before income taxes
Income tax expense
Earnings from continuing operations
Provision for discontinued operations, net
n e t e a r n i n g s
Basic earnings per common share:
Continuing operations
Discontinued operations
Net earnings
Diluted earnings per common share:
Continuing operations
Discontinued operations
Net earnings
The accompanying Notes are an integral part of these Consolidated Financial Statements.
44
c o n s o l i d aT e d s TaT e m e n T s o f c a s h f lo W s
In THouSAndS
Cash Flows from operating Activities:
Net earnings
Tax benefit of stock options exercised
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation
Amortization of deferred note expense and debt discount
Loss on early retirement of debt
Receipt of Finish Line stock
Deferred income taxes
Provision for losses on accounts receivable
Impairment of long-lived assets
Share-based compensation and restricted stock
Provision for discounted operations
Other
Effect on cash of changes in working capital and other assets
and liabilities, net of acquisitions:
Accounts receivable
Inventories
Prepaids and other current assets
Accounts payable
Other accrued liabilities
Other assets and liabilities
Net cash provided by operating activities
Cash Flows from Investing Activities:
Capital expenditures
Acquisitions, net of cash acquired
Proceeds from sale of property and equipment
Net cash used in investing activities
Cash Flows from Financing Activities:
Payments of long-term debt
Payments of capital leases
Borrowings under revolving credit facility
Payments on revolving credit facility
Tax benefit of stock options and restricted stock exercised
Shares repurchased
Change in overdraft balances
Dividends paid on non-redeemable preferred stock
Exercise of stock options and issue shares –
Employee Stock Purchase Plan
Other
Net cash (used in) provided by financing activities
net (decrease) Increase in Cash and Cash equivalents
Cash and cash equivalents at beginning of year
Genesco inc. AND SUBSIDIARIES
FISCAL YeAr
2010
2009
2008
$
28,813 $
150,756 $
-0-
(157)
5,171
(694)
47,033
2,022
5,518
46,757
3,905
-0-
-0-
(29,075)
3,680
415
13,314
6,969
452
2,152
6,649
1,079
8,570
8,031
9,006
1,845
45,114
3,653
-0-
-0-
(13,784)
137
8,722
7,851
2,633
1,805
(2,251)
2,156
(349)
(3,330)
(39,511)
24,027
3,154
11,441
1,661
(13,052)
(8,071)
(17,694)
(6,304)
11,728
142,096
179,103
(2,174)
(430)
(923)
6,722
23,943
(33,825)
(11,719)
13
(49,420)
(80,662)
(4,484)
16
(34)
6
(45,531)
(53,888)
(80,690)
(2,623)
(181)
(1,330)
(184)
-0-
(210)
197,400
295,400
365,000
(229,700)
(332,100)
(319,000)
-0-
-0-
3,102
(198)
499
(388)
157
(90,903)
2,420
(198)
694
-0-
10,649
(217)
1,492
-0-
795
-0-
(32,089)
(125,246)
57,711
64,476
17,672
(31)
964
17,703
16,739
Cash and cash equivalents at end of year
$
82,148 $
17,672 $
17,703
S u p p l e m e n t a l C a s h F l o w I n f o r m a t i o n :
Net cash paid for:
Interest $ 1,596 $
5,493 $
8,107
Income taxes
13,386
91,833
37,560
The accompanying Notes are an integral part of these Consolidated Financial Statements.
45
Genesco inc. AND SUBSIDIARIES
c o n s o l i d aT e d s TaT e m e n T s o f s h a r e h o l d e r s ’ e q u i T Y
In THouSAndS
Balance February 3, 2007 (as adjusted, see note 2) $
Cumulative effect of change in
ToTAL
non-redeeMABLe
PreFerred SToCk
6,602
CoMMon
SToCk
23,230 $
$
AddITIonAL
PAId-In
CAPITAL
119,506 $
ACCuMuLATed
oTHer
reTAIned CoMPreHenSIve
LoSS
eArnIngS
(21,327) $
301,487 $
ToTAL
TreASurY CoMPreHenSIve SHAreHoLderS’
equITY
InCoMe
$ 411,641
SToCk
(17,857)
accounting principle (see Note 11)
Net earnings
Dividends paid on non-redeemable
preferred stock
Exercise of stock options
Issue shares – employee stock
purchase plan
Employee and non-employee
restricted stock
Share-based compensation
Restricted shares withheld for taxes
Tax benefit of stock options exercised
Conversion of series 3 preferred stock
Conversion of series 4 preferred stock
Gain on foreign currency forward contracts
(net of tax of $0.0 million)
Pension liability adjustment
(net of tax of $2.7 million)
Postretirement liability adjustment
(net of tax of $0.4 million)
Foreign currency translation adjustment
Other
Comprehensive income
Balance February 2, 2008
Net earnings
Dividends paid on non-redeemable
preferred stock
Dividend declared – Finish Line stock
Exercise of stock options
Issue shares – employee stock
purchase plan
Shares repurchased
Restricted stock issuance
Employee and non-employee
restricted stock
Share-based compensation
Restricted shares withheld for taxes
Tax benefit of stock options and
restricted stock exercised
Adjustment of measurement date provision
of Retirement Benefit Topic
(net of tax of $0.0 million)
Loss on foreign currency forward contracts
(net of tax of $0.2 million)
Pension liability adjustment
(net of tax benefit of $8.5 million)
Postretirement liability adjustment
(net of tax of $0.1 million)
Foreign currency translation adjustment
Other
Comprehensive income
Balance January 31, 2009
Net earnings
Dividends paid on non-redeemable
preferred stock
Exercise of stock options
Issue shares – employee stock
purchase plan
Employee and non-employee
restricted stock
Share-based compensation
Restricted stock issuance
Restricted shares withheld for taxes
Tax expense of stock options and
restricted stock exercised
Shares repurchased
Conversion of 4 1/8% debentures
Loss on foreign currency forward contracts
(net of tax of $0.1 million)
Pension liability adjustment
(net of tax of $0.6 million)
Postretirement liability adjustment
(net of tax of $0.0 million)
Foreign currency translation adjustment
Other
Comprehensive income
Balance January 30, 2010
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
(533)
(561)
-0-
-0-
-0-
-0-
(170)
5,338
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
(135)
5,203
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
17
-0-
-0-
-0-
33
5
-0-
-0-
(19)
-0-
11
9
-0-
-0-
-0-
-0-
16
-0-
-0-
(4,260)
5,171
-0-
551
206
4,621
3,230
(887)
694
522
552
-0-
-0-
-0-
-0-
184
(217)
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
37
4,131
644
505
-0-
23,285
-0-
129,179
-0-
302,181
150,756
(16,010)
-0-
-0-
-0-
83
-0-
-0-
1,355
(198)
(29,075)
-0-
2
(4,000)
416
53
(86,903)
(416)
-0-
-0-
(53)
6,341
1,690
(1,092)
-0-
(563)
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
$
-0-
5,171
(4,260)
5,171
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
(217)
584
211
4,621
3,230
(906)
694
-0-
-0-
37
37
4,131
4,131
-0-
-0-
-0-
644
505
-0-
10,488
426,116
-0- $ 150,756
$
(17,857)
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
(275)
644
505
30
150,756
(198)
(29,075)
1,438
55
(90,903)
-0-
6,341
1,690
(1,145)
(563)
(69)
(275)
-0-
-0-
-0-
-0-
-0-
(1)
-0-
-0-
-0-
-0-
-0-
136
(69)
-0-
-0-
(275)
-0-
(13,355)
-0-
(13,355)
(13,355)
-0-
-0-
-0-
119
(1,177)
-0-
-0-
-0-
-0-
119
(1,177)
-0-
$ 136,068
19,732
-0-
49,780
-0-
423,595
28,813
(30,698)
-0-
(17,857)
-0- $
28,813
-0-
28
4
-0-
-0-
405
(65)
-0-
(85)
4,553
-0-
-0-
-0-
-0-
(9)
-0-
372
95
6,528
441
(405)
(1,156)
(658)
(1,942)
93,933
-0-
-0-
-0-
-0-
(7)
(198)
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
(157)
1,151
14
886
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
$
119
(1,177)
-0-
449,755
28,813
(198)
400
99
6,528
441
-0-
(1,221)
(658)
(2,027)
98,486
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
(157)
(157)
1,151
1,151
14
886
-0-
30,707
14
886
1
$
5,220
$ 24,563 $ 146,981 $ 452,210 $ (28,804) $ (17,857)
$
582,313
The accompanying Notes are an integral part of these Consolidated Financial Statements.
46
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 1: summary of significant accounting policies
n aT u r e o f o p e r aT i o n s
The Company’s businesses include the design or sourcing, marketing and distribution of footwear, principally under
the Johnston & Murphy and Dockers brands and the operation at January 30, 2010 of 2,276 Journeys, Journeys Kidz,
Shi by Journeys, Johnston & Murphy, Underground Station, Hat World, Lids, Hat Shack, Hat Zone, Head Quarters,
Cap Connection, Lids Locker Room and Sports Fan-Attic retail footwear, headwear and licensed sports apparel and
accessory stores. In November 2008, the Company acquired Impact Sports and in September 2009, the Company
acquired Great Plains Sports, both dealers of branded athletic and team products for college and high school teams,
as part of the Hat World Group. In November 2009, the Company acquired Sports Fan-Attic, a retailer of licensed
sports headwear, apparel, accessories and novelties, with 37 stores, as part of the Hat World Group.
p r i n c i p l e s o f c o n s o l i d aT i o n
All subsidiaries are consolidated in the consolidated financial statements. All significant intercompany transactions
and accounts have been eliminated.
f i s c a l Y e a r
The Company’s fiscal year ends on the Saturday closest to January 31. As a result, Fiscal 2010 was a 52-week year
with 364 days, Fiscal 2009 was a 52-week year with 364 days and Fiscal 2008 was a 52-week year with 364 days. Fiscal
2010 ended on January 30, 2010, Fiscal 2009 ended on January 31, 2009 and Fiscal 2008 ended on February 2, 2008.
f i n a n c i a l s TaT e m e n T r e c l a s s i f i c aT i o n s
Certain reclassifications have been made to conform prior years’ data to the current year presentation. In the Fiscal
2009 and 2008 Consolidated Statements of Operations, bank fees totaling approximately $3.6 million and $3.3 million,
respectively, were reclassified from interest expense to selling, general and administrative expenses.
u s e o f e s T i m aT e s
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant areas requiring management estimates or judgments include the following key financial areas:
I N V E N T O R Y V A L U AT I O N
The Company values its inventories at the lower of cost or market.
In its wholesale operations, cost is determined using the first-in, first-out (“FIFO”) method. Market is determined using
a system of analysis which evaluates inventory at the stock number level based on factors such as inventory turn,
average selling price, inventory level, and selling prices reflected in future orders. The Company provides reserves
when the inventory has not been marked down to market based on current selling prices or when the inventory is not
turning and is not expected to turn at levels satisfactory to the Company.
In its retail operations, other than the Hat World segment, the Company employs the retail inventory method, applying
average cost-to-retail ratios to the retail value of inventories. Under the retail inventory method, valuing inventory at the
lower of cost or market is achieved as markdowns are taken or accrued as a reduction of the retail value of inventories.
Inherent in the retail inventory method are subjective judgments and estimates, including merchandise mark-on,
markups, markdowns, and shrinkage. These judgments and estimates, coupled with the fact that the retail inventory
method is an averaging process, could produce a range of cost figures. To reduce the risk of inaccuracy and to
ensure consistent presentation, the Company employs the retail inventory method in multiple subclasses of inventory
with similar gross margins, and analyzes markdown requirements at the stock number level based on factors such as
inventory turn, average selling price, and inventory age. In addition, the Company accrues markdowns as necessary.
These additional markdown accruals reflect all of the above factors as well as current agreements to return products
to vendors and vendor agreements to provide markdown support. In addition to markdown provisions, the Company
maintains provisions for shrinkage and damaged goods based on historical rates.
47
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 1: summary of significant accounting policies, continued
The Hat World segment employs the moving average cost method for valuing inventories and applies freight using an
allocation method. The Company provides a valuation allowance for slow-moving inventory based on negative margins
and estimated shrink based on historical experience and specific analysis, where appropriate.
Inherent in the analysis of both wholesale and retail inventory valuation are subjective judgments about current market
conditions, fashion trends, and overall economic conditions. Failure to make appropriate conclusions regarding these
factors may result in an overstatement or understatement of inventory value.
I M PA I R M E N T O F LO N G - L I V E D A S S E T S
The Company periodically assesses the realizability of its long-lived assets and evaluates such assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Asset impairment is determined to exist if estimated future cash flows, undiscounted and without interest charges, are
less than the carrying amount. Inherent in the analysis of impairment are subjective judgments about future cash flows.
Failure to make appropriate conclusions regarding these judgments may result in an overstatement or understatement
of the value of long-lived assets. See also Notes 5 and 7.
The goodwill impairment test involves a two-step process. The first step is a comparison of the fair value and carrying
value of the reporting unit with which the goodwill is associated. The Company estimates fair value using the best
information available, and computes the fair value by an equal weighting of the results arrived by a market approach
and an income approach utilizing discounted cash flow projections. The income approach uses a projection of a
business unit’s estimated operating results and cash flows that is discounted using a weighted-average cost of capital
that reflects current market conditions. The projection uses management’s best estimates of economic and market
conditions over the projected period including growth rates in sales, costs, estimates of future expected changes in
operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth
rates, future estimates of capital expenditures and changes in future working capital requirements.
If the carrying value of the reporting unit is higher than its fair value, there is an indication that impairment may exist
and the second step must be performed to measure the amount of impairment loss. The amount of impairment is
determined by comparing the implied fair value of reporting unit goodwill to the carrying value of the goodwill in the
same manner as if the reporting unit was being acquired in a business combination. Specifically, the Company would
allocate the fair value to all of the assets and liabilities of the reporting unit, including any unrecognized intangible
assets, in a hypothetical analysis that would calculate the implied fair value of goodwill. If the implied fair value of
goodwill is less than the recorded goodwill, the Company would record an impairment charge for the difference.
A key assumption in the Company’s fair value estimate is the weighted average cost of capital utilized for discounting
its cash flow projections in its income approach. The Company believes the rate it used in its annual test was
consistent with the risks inherent in its business and with industry discount rates.
E N V I R O N M E N TA L A N D O T H E R C O N T I N G E N C I E S
The Company is subject to certain loss contingencies related to environmental proceedings and other legal matters,
including those disclosed in Note 15. The Company has made pretax accruals for certain of these contingencies,
including approximately $0.8 million reflected in Fiscal 2010, $9.4 million reflected in Fiscal 2009 and $2.9 million
reflected in Fiscal 2008. These charges are included in provision for discontinued operations, net in the Consolidated
Statements of Operations (see Note 5). The Company monitors these matters on an ongoing basis and, on a
quarterly basis, management reviews the Company’s reserves and accruals in relation to each of them, adjusting
provisions as management deems necessary in view of changes in available information. Changes in estimates of
liability are reported in the periods when they occur. Consequently, management believes that its reserve in relation
to each proceeding is a best estimate of probable loss connected to the proceeding, or in cases in which no best
estimate is possible, the minimum amount in the range of estimated losses, based upon its analysis of the facts
and circumstances as of the close of the most recent fiscal quarter. However, because of uncertainties and risks
inherent in litigation generally and in environmental proceedings in particular, there can be no assurance that future
48
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 1: summary of significant accounting policies, continued
developments will not require additional reserves to be set aside, that some or all reserves will be adequate or that
the amounts of any such additional reserves or any such inadequacy will not have a material adverse effect upon the
Company’s financial condition or results of operations.
R E V E N U E R E C O G N I T I O N
Retail sales are recorded at the point of sale and are net of estimated returns and exclude sales taxes. Catalog and
internet sales are recorded at time of delivery to the customer and are net of estimated returns and exclude sales taxes.
Wholesale revenue is recorded net of estimated returns and allowances for markdowns, damages and miscellaneous
claims when the related goods have been shipped and legal title has passed to the customer. Shipping and handling
costs charged to customers are included in net sales. Estimated returns are based on historical returns and claims.
Actual amounts of markdowns have not differed materially from estimates. Actual returns and claims in any future
period may differ from historical experience.
I N C O M E TA x E S
As part of the process of preparing Consolidated Financial Statements, the Company is required to estimate its income
taxes in each of the tax jurisdictions in which it operates. This process involves estimating actual current tax obligations
together with assessing temporary differences resulting from differing treatment of certain items for tax and accounting
purposes, such as depreciation of property and equipment and valuation of inventories. These temporary differences
result in deferred tax assets and liabilities, which are included within the Consolidated Balance Sheets. The Company
then assesses the likelihood that its deferred tax assets will be recovered from future taxable income. Actual results
could differ from this assessment if adequate taxable income is not generated in future periods. To the extent the
Company believes that recovery of an asset is at risk, valuation allowances are established. To the extent valuation
allowances are established or increased in a period, the Company includes an expense within the tax provision in the
Consolidated Statements of Operations.
Income tax reserves are determined using the methodology required by the Income Tax Topic of the FASB Accounting
Standards Codification. This methodology was adopted by the Company as of February 4, 2007, and requires
companies to assess each income tax position taken using a two step process. A determination is first made as to
whether it is more likely than not that the position will be sustained, based upon the technical merits, upon examination
by the taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded
for the tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of
the respective tax position. Uncertain tax positions require determinations and estimated liabilities to be made based
on provisions of the tax law which may be subject to change or varying interpretation. If the Company’s determinations
and estimates prove to be inaccurate, the resulting adjustments could be material to its future financial results.
P O S T R E T I R E M E N T B E N E F I T S P L A N A C C O U N T I N G
Full-time employees who had 1,000 hours of service in calendar year 2004, except employees in the Hat World Segment,
are covered by a defined benefit pension plan. The Company froze the defined benefit pension plan effective January 1,
2005. The Company also provides certain former employees with limited medical and life insurance benefits.
The Company funds at least the minimum amount required by the Employee Retirement Income Security Act.
As required by the Compensation-Retirement Benefits Topic of the FASB Accounting Standards Codification, the
Company is required to recognize the overfunded or underfunded status of postretirement benefit plans as an asset
or liability in their Consolidated Balance Sheets and to recognize changes in that funded status in accumulated other
comprehensive loss, net of tax, in the year in which the changes occur. The Company is required to measure the
funded status of a plan as of the date of its fiscal year end. The Company adopted the measurement date change as
of January 31, 2009. The Company was required to change the measurement date for its defined benefit pension plan
and postretirement benefit plan from December 31 to January 31 (end of fiscal year). As a result of this change, pension
expense and actuarial gains/losses for the one-month period ended January 31, 2009 were recognized as adjustments
to retained earnings and accumulated other comprehensive loss, respectively. The after-tax charge to retained earnings
was $0.1 million. The adoption of the measurement date provision had no effect on the Company’s Consolidated
Statements of Operations for Fiscal 2009 or any prior period presented.
49
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 1: summary of significant accounting policies, continued
The Company accounts for the defined benefit pension plans using the Compensation-Retirement Benefits Topic of the
FASB Accounting Standards Codification. As permitted under this topic, pension expense is recognized on an accrual
basis over employees’ approximate service periods. The calculation of pension expense and the corresponding liability
requires the use of a number of critical assumptions, including the expected long-term rate of return on plan assets and
the assumed discount rate, as well as the recognition of actuarial gains and losses. Changes in these assumptions can
result in different expense and liability amounts, and future actual experience can differ from these assumptions.
S H A R E - B A S E D C O M P E N S AT I O N
The Company has share-based compensation plans covering certain members of management and non-employee
directors. The Company recognizes compensation expense for share-based payments based on the fair value of the
awards as required by the Compensation – Stock Compensation Topic of the FASB Accounting Standards Codification.
For Fiscal 2010, 2009 and 2008, share-based compensation expense was $0.5 million, $1.7 million and $3.2 million,
respectively. For Fiscal 2010, 2009 and 2008, restricted stock expense was $6.5 million, $6.3 million and $4.6 million,
respectively. The benefits of tax deductions in excess of recognized compensation expense are reported as a financing
cash flow.
The Company estimates the fair value of each option award on the date of grant using a Black-Scholes option pricing
model. The application of this valuation model involves assumptions that are judgmental and highly sensitive in the
determination of compensation expense, including expected stock price volatility. The Company bases expected
volatility on historical stock prices for a period that is commensurate with the expected term estimate. The Company
bases the risk free rate on an interest rate for a bond with a maturity commensurate with the expected term estimate.
The Company estimates the expected term of stock options using historical exercise and employee termination
experience. The Company does not currently pay a dividend on common stock. The fair value of employee restricted
stock is determined based on the closing price of the Company’s stock on the date of the grant.
In addition to the key assumptions used in the Black-Scholes model, the estimated forfeiture rate at the time of
valuation (which is based on historical experience for similar options) is a critical assumption, as it reduces expense
ratably over the vesting period. Share-based compensation expense is recorded based on a 2% expected forfeiture
rate and is adjusted annually for actual forfeitures. The Company reviews the expected forfeiture rate annually to
determine if that percent is still reasonable based on historical experience. The Company believes its estimates are
reasonable in the context of actual (historical) experience.
c a s h a n d c a s h e q u i v a l e n T s
Included in cash and cash equivalents at January 30, 2010 and January 31, 2009 are cash equivalents of $62.7 million
and $0.1 million, respectively. Cash equivalents are highly-liquid financial instruments having an original maturity of
three months or less. The Company’s $62.7 million of cash equivalents was invested in a U.S. government money
market fund which invests exclusively in high-quality, short-term securities that are issued or guaranteed by the U.S.
government or by U.S. government agencies and instrumentalities. Uninsured cash balances were $6.3 million as
of January 30, 2010. The majority of payments due from banks for customer credit card transactions process within
24–48 hours and are accordingly classified as cash and cash equivalents.
At January 30, 2010 and January 31, 2009 outstanding checks drawn on zero-balance accounts at certain domestic
banks exceeded book cash balances at those banks by approximately $31.9 million and $28.8 million, respectively.
These amounts are included in accounts payable.
c o n c e n T r aT i o n o f c r e d i T r i s k a n d a l lo W a n c e s o n a c c o u n T s r e c e i v a B l e
The Company’s footwear wholesale businesses sell primarily to independent retailers and department stores across the
United States. Receivables arising from these sales are not collateralized. Customer credit risk is affected by conditions
or occurrences within the economy and the retail industry as well as by customer specific factors. One customer
accounted for 20% of the Company’s trade receivables balance and no other customer accounted for more than 10% of
the Company’s trade receivables balance as of January 30, 2010.
50
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 1: summary of significant accounting policies, continued
The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific
customers, historical trends and other information, as well as customer specific factors. The Company also establishes
allowances for sales returns, customer deductions and co-op advertising based on specific circumstances, historical
trends and projected probable outcomes.
p r o p e r T Y a n d e q u i p m e n T
Property and equipment are recorded at cost and depreciated or amortized over the estimated useful life of related
assets. Depreciation and amortization expense are computed principally by the straight-line method over the
following estimated useful lives:
BUILDINGS AND BUILDING EQUIPMENT
20–45 YEARS
COMPUTER HARDWARE, SOFTWARE AND EQUIPMENT
3–10 YEARS
FURNITURE AND FIxTURES
10 YEARS
l e a s e s
Leasehold improvements and properties under capital leases are amortized on the straight-line method over the shorter
of their useful lives or their related lease terms and the charge to earnings is included in selling and administrative
expenses in the Consolidated Statements of Operations.
Certain leases include rent increases during the initial lease term. For these leases, the Company recognizes the
related rental expense on a straight-line basis over the term of the lease (which includes any rent holidays and the pre-
opening period of construction, renovation, fixturing and merchandise placement) and records the difference between
the amounts charged to operations and amounts paid as deferred rent.
The Company occasionally receives reimbursements from landlords to be used towards construction of the store the
Company intends to lease. Leasehold improvements are recorded at their gross costs including items reimbursed by
landlords. The reimbursements are amortized as a reduction of rent expense over the initial lease term.
G o o d W i l l a n d o T h e r i n Ta n G i B l e s
Under the provisions of the Intangibles – Goodwill and Other Topic of the FASB Accounting Standards Codification,
goodwill and intangible assets with indefinite lives are not amortized, but are tested at least annually, during the fourth
quarter, for impairment. The Company will update the tests between annual tests if events or circumstances occur
that would more likely than not reduce the fair value of the business unit with which the goodwill is associated below
its carrying amount. It is also required that intangible assets with finite lives be amortized over their respective lives
to their estimated residual values, and reviewed for impairment in accordance with the Property, Plant and Equipment
Topic of the FASB Accounting Standards Codification.
Intangible assets of the Company with indefinite lives are primarily goodwill and identifiable trademarks acquired in
connection with the acquisition of Hat World Corporation in April 2004, Hat Shack, Inc. in January 2007, Impact Sports
in November 2008, Great Plains Sports in September 2009 and Sports Fan-Attic in November 2009. The Consolidated
Balance Sheets include goodwill for the Hat World Group of $119.0 million at January 30, 2010 and $111.7 million
at January 31, 2009, respectively. The Company tests for impairment of intangible assets with an indefinite life, at a
minimum on an annual basis, relying on a number of factors including operating results, business plans, projected
future cash flows and observable market data. The impairment test for identifiable assets not subject to amortization
consists of a comparison of the fair value of the intangible asset with its carrying amount. The Company has not had
an impairment charge for intangible assets.
Identifiable intangible assets of the Company with finite lives are primarily in-place leases and customer lists. They
are subject to amortization based upon their estimated useful lives. Finite-lived intangible assets are evaluated for
impairment using a process similar to that used to evaluate other definite-lived long-lived assets, a comparison of the
fair value of the intangible asset with its carrying amount. An impairment loss is recognized for the amount by which
the carrying value exceeds the fair value of the asset.
51
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 1: summary of significant accounting policies, continued
fa i r v a l u e o f f i n a n c i a l i n s T r u m e n T s
The carrying amounts and fair values of the Company’s financial instruments at January 30, 2010 and January 31, 2009 are:
fa i r v a l u e s
I n T H o u S A n d S
Fixed Rate Long-Term Debt
Revolver Borrowings
J A n u A r Y 3 0 , 2 0 1 0
J A N U A R Y 3 1 , 2 0 0 9
C A r r Y I n g
A M o u n T
-0-
$
-0-
FA I r
v A L u e
-0-
-0-
$
C A R R Y I N G
A M O U N T
$ 86,220
32,300
FA I R
V A L U E
$ 77,518
29,186
Carrying amounts reported on the Consolidated Balance Sheets for cash, cash equivalents, receivables and accounts
payable approximate fair value due to the short-term maturity of these instruments.
The fair value of the Company’s long-term debt in Fiscal 2009 was based on a valuation using the Discounted Cash
Flow method.
c o s T o f s a l e s
For the Company’s retail operations, the cost of sales includes actual product cost, the cost of transportation to the
Company’s warehouses from suppliers and the cost of transportation from the Company’s warehouses to the stores.
Additionally, the cost of its distribution facilities allocated to its retail operations is included in cost of sales.
For the Company’s wholesale operations, the cost of sales includes the actual product cost and the cost of transportation
to the Company’s warehouses from suppliers.
s e l l i n G a n d a d m i n i s T r aT i v e e x p e n s e s
Selling and administrative expenses include all operating costs of the Company excluding (i) those related to the
transportation of products from the supplier to the warehouse, (ii) for its retail operations, those related to the transportation
of products from the warehouse to the store and (iii) costs of its distribution facilities which are allocated to its retail
operations. Wholesale and unallocated retail costs of distribution are included in selling and administrative expenses in
the amounts of $4.8 million, $4.2 million and $3.8 million for Fiscal 2010, Fiscal 2009 and Fiscal 2008, respectively.
G i f T c a r d s
The Company has a gift card program that began in calendar 1999 for its Hat World operations and calendar 2000 for
its footwear operations. The gift cards issued to date do not expire. As such, the Company recognizes income when:
(i) the gift card is redeemed by the customer; or (ii) the likelihood of the gift card being redeemed by the customer for
the purchase of goods in the future is remote and there are no related escheat laws (referred to as “breakage”). The
gift card breakage rate is based upon historical redemption patterns and income is recognized for unredeemed gift
cards in proportion to those historical redemption patterns.
Gift card breakage is recognized in revenues each period. Gift card breakage recognized as revenue was $0.7 million,
$0.5 million and $0.3 million for Fiscal 2010, 2009 and 2008, respectively. The Consolidated Balance Sheets include
an accrued liability for gift cards of $7.9 million and $7.5 million at January 30, 2010 and January 31, 2009, respectively.
B u Y i n G , m e r c h a n d i s i n G a n d o c c u pa n c Y c o s T s
The Company records buying, merchandising and occupancy costs in selling and administrative expense. Because
the Company does not include these costs in cost of sales, the Company’s gross margin may not be comparable to
other retailers that include these costs in the calculation of gross margin.
s h i p p i n G a n d h a n d l i n G c o s T s
Shipping and handling costs related to inventory purchased from suppliers are included in the cost of inventory and are
charged to cost of sales in the period that the inventory is sold. All other shipping and handling costs are charged to
cost of sales in the period incurred except for wholesale and unallocated retail costs of distribution, which are included
in selling and administrative expenses.
52
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 1: summary of significant accounting policies, continued
p r e o p e n i n G c o s T s
Costs associated with the opening of new stores are expensed as incurred, and are included in selling and administrative
expenses on the accompanying Consolidated Statements of Operations.
s T o r e c lo s i n G s a n d e x i T c o s T s
From time to time, the Company makes strategic decisions to close stores or exit locations or activities. If stores or
operating activities to be closed or exited constitute components, as defined by the Property, Plant and Equipment
Topic of the FASB Accounting Standards Codification, and will not result in a migration of customers and cash flows,
these closures will be considered discontinued operations when the related assets meet the criteria to be classified as
held for sale, or at the cease-use date, whichever occurs first. The results of operations of discontinued operations are
presented retroactively, net of tax, as a separate component on the Consolidated Statements of Operations, if material
individually or cumulatively. To date, no store closings meeting the discontinued operations criteria have been material
individually or cumulatively.
Assets related to planned store closures or other exit activities are reflected as assets held for sale and recorded at the
lower of carrying value or fair value less costs to sell when the required criteria, as defined by the Property, Plant and
Equipment Topic of the FASB Accounting Standards Codification, are satisfied. Depreciation ceases on the date that
the held for sale criteria are met.
Assets related to planned store closures or other exit activities that do not meet the criteria to be classified as held for
sale are evaluated for impairment in accordance with the Company’s normal impairment policy, but with consideration
given to revised estimates of future cash flows. In any event, the remaining depreciable useful lives are evaluated and
adjusted as necessary.
Exit costs related to anticipated lease termination costs, severance benefits and other expected charges are accrued
for and recognized in accordance with the Exit or Disposal Cost Obligations Topic of the FASB Accounting Standards
Codification.
a d v e r T i s i n G c o s T s
Advertising costs are predominantly expensed as incurred. Advertising costs were $33.8 million, $34.8 million and $33.7
million for Fiscal 2010, 2009 and 2008, respectively. Direct response advertising costs for catalogs are capitalized in
accordance with the Other Assets and Deferred Costs Topic for Capitalized Advertising Costs of the FASB Accounting
Standards Codification. Such costs are amortized over the estimated future revenues realized from such advertising,
not to exceed six months. The Consolidated Balance Sheets include prepaid assets for direct response advertising
costs of $1.3 million and $1.2 million at January 30, 2010 and January 31, 2009, respectively.
c o n s i d e r aT i o n T o r e s e l l e r s
The Company does not have any written buy-down programs with retailers, but the Company has provided certain
retailers with markdown allowances for obsolete and slow moving products that are in the retailer’s inventory. The
Company estimates these allowances and provides for them as reductions to revenues at the time revenues are
recorded. Markdowns are negotiated with retailers and changes are made to the estimates as agreements are reached.
Actual amounts for markdowns have not differed materially from estimates.
c o o p e r aT i v e a d v e r T i s i n G
Cooperative advertising funds are made available to all of the Company’s wholesale customers. In order for retailers
to receive reimbursement under such programs, the retailer must meet specified advertising guidelines and provide
appropriate documentation of expenses to be reimbursed. The Company’s cooperative advertising agreements require
that wholesale customers present documentation or other evidence of specific advertisements or display materials used
for the Company’s products by submitting the actual print advertisements presented in catalogs, newspaper inserts or
other advertising circulars, or by permitting physical inspection of displays. Additionally, the Company’s cooperative
advertising agreements require that the amount of reimbursement requested for such advertising or materials be
53
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 1: summary of significant accounting policies, continued
supported by invoices or other evidence of the actual costs incurred by the retailer. The Company accounts for these
cooperative advertising costs as selling and administrative expenses, in accordance with the Revenue Recognition
Topic for Customer Payments and Incentives of the FASB Accounting Standards Codification.
Cooperative advertising costs recognized in selling and administrative expenses were $2.8 million, $2.6 million and $3.3
million for Fiscal 2010, 2009 and 2008, respectively. During Fiscal 2010, 2009 and 2008, the Company’s cooperative
advertising reimbursements paid did not exceed the fair value of the benefits received under those agreements.
v e n d o r a l lo W a n c e s
From time to time, the Company negotiates allowances from its vendors for markdowns taken or expected to be
taken. These markdowns are typically negotiated on specific merchandise and for specific amounts. These specific
allowances are recognized as a reduction in cost of sales in the period in which the markdowns are taken. Markdown
allowances not attached to specific inventory on hand or already sold are applied to concurrent or future purchases
from each respective vendor.
The Company receives support from some of its vendors in the form of reimbursements for cooperative advertising and
catalog costs for the launch and promotion of certain products. The reimbursements are agreed upon with vendors and
represent specific, incremental, identifiable costs incurred by the Company in selling the vendor’s specific products.
Such costs and the related reimbursements are accumulated and monitored on an individual vendor basis, pursuant
to the respective cooperative advertising agreements with vendors. Such cooperative advertising reimbursements are
recorded as a reduction of selling and administrative expenses in the same period in which the associated expense
is incurred. If the amount of cash consideration received exceeds the costs being reimbursed, such excess amount
would be recorded as a reduction of cost of sales.
Vendor reimbursements of cooperative advertising costs recognized as a reduction of selling and administrative
expenses were $3.6 million, $4.0 million and $4.3 million for Fiscal 2010, 2009 and 2008, respectively. During Fiscal
2010, 2009 and 2008, the Company’s cooperative advertising reimbursements received were not in excess of the costs
incurred.
e n v i r o n m e n Ta l c o s T s
Environmental expenditures relating to current operations are expensed or capitalized as appropriate. Expenditures
relating to an existing condition caused by past operations, and which do not contribute to current or future revenue
generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are
probable and the costs can be reasonably estimated and are evaluated independently of any future claims for recovery.
Generally, the timing of these accruals coincides with completion of a feasibility study or the Company’s commitment
to a formal plan of action. Costs of future expenditures for environmental remediation obligations are not discounted
to their present value.
e a r n i n G s p e r c o m m o n s h a r e
Basic earnings per share excludes dilution and is computed by dividing income available to common shareholders by
the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the
potential dilution that could occur if securities to issue common stock were exercised or converted to common stock
(see Note 13).
o T h e r c o m p r e h e n s i v e i n c o m e
The Comprehensive Income Topic of the FASB Accounting Standards Codification requires, among other things, the
Company’s pension liability adjustment, postretirement liability adjustment, unrealized gains or losses on foreign
currency forward contracts and foreign currency translation adjustments to be included in other comprehensive income
net of tax. Accumulated other comprehensive loss at January 30, 2010 consisted of $28.9 million of cumulative
pension liability adjustments, net of tax, a cumulative net loss of $0.2 million on foreign currency forward contracts, net
of tax, offset by a foreign currency translation adjustment of $0.3 million.
54
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 1: summary of significant accounting policies, continued
B u s i n e s s s e G m e n T s
The Segment Reporting Topic of the FASB Accounting Standards Codification, requires that companies disclose
“operating segments” based on the way management disaggregates the Company’s operations for making internal
operating decisions (see Note 16).
d e r i v aT i v e i n s T r u m e n T s a n d h e d G i n G a c T i v i T i e s
The Derivatives and Hedging Topic of the FASB Accounting Standards Codification requires an entity to recognize all
derivatives as either assets or liabilities in the consolidated balance sheet and to measure those instruments at fair
value. Under certain conditions, a derivative may be specifically designated as a fair value hedge or a cash flow hedge.
The accounting for changes in the fair value of a derivative are recorded each period in current earnings or in other
comprehensive income depending on the intended use of the derivative and the resulting designation. The Company
has entered into a small amount of foreign currency forward exchange contracts in order to reduce exposure to foreign
currency exchange rate fluctuations in connection with inventory purchase commitments for its Johnston & Murphy
Group. Derivative instruments used as hedges must be effective at reducing the risk associated with the exposure
being hedged. The settlement terms of the forward contracts correspond with the expected payment terms for the
merchandise inventories. As a result, there is no hedge ineffectiveness to be reflected in earnings.
The notional amount of such contracts outstanding at January 30, 2010 was $0.6 million. There were no contracts
outstanding at January 31, 2009. Forward exchange contracts have an average remaining term of approximately six
months. The loss based on spot rates under these contracts at January 30, 2010 was less than $0.1 million. For the
year ended January 30, 2010, the Company recorded an unrealized loss on foreign currency forward contracts of $0.3
million in accumulated other comprehensive loss, before taxes. The Company monitors the credit quality of the major
national and regional financial institutions with which it enters into such contracts.
The Company estimates that the majority of net hedging losses related to forward exchange contracts will be reclassified
from accumulated other comprehensive loss into earnings through higher cost of sales over the succeeding year.
n e W a c c o u n T i n G p r i n c i p l e s
In June 2009, the FASB established the FASB Accounting Standards Codification (the “Codification”) as the source
of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the
preparation of financial statements in conformity with U.S. GAAP. The Codification does not change current U.S. GAAP,
but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related
to a particular topic in one place. The Codification is effective for interim and annual periods ending after September
15, 2009, and as of the effective date, all existing accounting standard documents will be superseded. The Company
adopted the Codification effective for its third quarter ended October 31, 2009, and accordingly, all subsequent public
filings will reference the Codification as the sole source of authoritative literature.
In December 2008, the FASB updated the Compensation-Retirement Benefits Topic of the Codification to require more
detailed disclosures about the assets of a defined benefit pension or other postretirement plan and is effective for fiscal
years ending after December 15, 2009 (Fiscal 2010 for the Company). The Company adopted this updated guidance
as of January 30, 2010 and it did not have a significant impact on its results of operations or financial position (see
Note 12).
note 2: change in method of accounting for convertible subordinated debentures
In May 2008, the FASB updated the Debt Topic, specifically Debt with Conversion and Other Options, of the Codification
to require the issuer of certain convertible debt instruments that may be settled in cash (or other assets) on conversion
to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner
that reflects the issuer’s nonconvertible debt borrowing rate. The Company adopted this update to the Codification as
of February 1, 2009. The value assigned to the debt component is the estimated fair value, as of the issuance date, of
a similar debt instrument without the conversion feature, and the difference between the proceeds for the convertible
debt and the amount reflected as a debt liability is then recorded as additional paid-in capital. As a result, the debt is
55
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 2: change in method of accounting for convertible subordinated debentures, continued
effectively recorded at a discount reflecting its below market coupon interest rate. The debt is subsequently accreted
to its par value over its expected life, with the rate of interest that reflects the market rate at issuance being reflected in
the Consolidated Statements of Operations.
Upon adoption, the Company measured the fair value of the Company’s $86.2 million 4 1/8% Convertible Subordinated
Debentures issued in June 2003, using an interest rate that the Company could have obtained at the date of issuance
for similar debt instruments. Based on this analysis, the Company determined that the fair value of the debentures was
approximately $66.6 million as of the issuance date, a reduction of approximately $19.6 million in the carrying value
of the debentures, of which $11.5 million was recorded as additional paid-in capital, $7.4 million was recorded as a
deferred tax liability and $0.7 million as a reduction to deferred note expense.
In accordance with this update to the Codification, the Company is required to allocate a portion of the $2.9 million
of debt issuance costs that were directly related to the issuance of the debentures between a liability component
and an equity component as of the issuance date. Based on this analysis, the Company reclassified approximately
$0.7 million from deferred note expense as discussed above.
The retroactive application of this update to the Codification resulted in the recognition of additional pretax non-cash
interest expense for Fiscal 2009 and Fiscal 2008 of $3.1 million and $2.8 million, respectively and a change to February 3,
2007 retained earnings balance of $5.1 million.
The following table sets forth the effect of the retrospective application of this update to the Codification on certain
previously reported line items:
In THouSAndS
ConSoLIdATed STATeMenT oF oPerATIonS:
Interest expense*
Income taxes
Net earnings
Diluted earnings per common share:
Continuing operations
Net earnings
TWeLve MonTHS ended
JAnuArY 31, 2009
TWeLve MonTHS ended
FeBruArY 2, 2008
AS PrevIouSLY
rePorTed
AdJuSTMenT
AS AdJuSTed
AS PrevIouSLY
rePorTed
AdJuSTMenT AS AdJuSTed
$ 6,166
95,683
152,636
$ 3,068
(1,188)
(1,880)
$
9,234
94,495
150,756
$ 9,230
24,247
6,885
$ 2,815 $ 12,045
23,146
5,171
(1,101)
(1,714)
$
$
6.72
6.49
$
$
.00
.00
$
$
6.72
6.49
$
$
0.36
0.29
$ (0.07) $
$ (0.07) $
0.29
0.22
*Previously reported interest expense for Fiscal 2009 and 2008 was adjusted for bank fees reclassed of $3,566 and $3,340, respectively. See Note 1.
56
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 2: change in method of accounting for convertible subordinated debentures, continued
Genesco inc. AND SUBSIDIARIES
In THouSAndS
ConSoLIdATed BALAnCe SHeeTS:
Noncurrent deferred income taxes
Other noncurrent assets
Total Assets
Long-term debt
Total Liabilities
Additional paid-in capital
Retained earnings
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
TWeLve MonTHS ended
JAnuArY 31, 2009
AS PrevIouSLY
rePorTed
AdJuSTMenT AS AdJuSTed
$
7,132
7,584
818,027
$ (1,830) $
(134)
(1,964)
5,302
7,450
816,063
118,520
371,093
(4,785)
(4,785)
113,735
366,308
38,230
432,324
446,934
818,027
11,550
(8,729)
2,821
(1,964)
49,780
423,595
449,755
816,063
The amount of interest expense recognized and the effective interest rate for the Company’s convertible debentures
were as follows:
In THouSAndS
Contractual coupon interest
Amortization of discount on
convertible debentures
Interest expense
TWeLve MonTHS ended
JAnuArY 30, 2010
$ 1,543
JAnuArY 31, 2009
$ 3,557
FeBruArY 2, 2008
$ 3,557
1,465
$ 3,008
3,164
$ 6,721
2,911
$ 6,468
Effective interest rate
8.5%
8.5%
8.5%
note 3: Terminated merger agreement
The Company announced in June 2007 that the boards of directors of both Genesco and The Finish Line, Inc. had
unanimously approved a definitive merger agreement under which The Finish Line would acquire all of the outstanding
common shares of Genesco at $54.50 per share in cash (the “Proposed Merger”). The Finish Line refused to close
the Proposed Merger and litigation ensued. The Proposed Merger and related agreement were terminated in March
2008 in connection with an agreement to settle the litigation with The Finish Line and UBS Loan Finance LLC and UBS
Securities LLC (collectively, “UBS”) for a cash payment of $175.0 million to the Company and a 12% equity stake in
The Finish Line, which the Company received in the first quarter of Fiscal 2009. The Company distributed the 12%
equity stake, or 6,518,971 shares of Class A Common Stock of The Finish Line, Inc., on June 13, 2008, to its common
shareholders of record on May 30, 2008, as required by the settlement agreement. During Fiscal 2009 and 2008, the
Company expensed $8.0 million and $27.6 million, respectively, in merger-related litigation costs. The total merger-
related litigation costs for Fiscal 2008 of $27.6 million were tax deductible in Fiscal 2009 and resulted in a permanent
tax benefit reflected as a component of income tax expense. For additional information, see the “Merger-Related
Litigation” section in Note 15.
note 4: acquisitions and intangible assets
s p o r T s fa n - aT T i c a c q u i s i T i o n
In the fourth quarter of Fiscal 2010, the Company’s Hat World subsidiary acquired the assets of Sports Fan-Attic, a
retailer of licensed sports headwear, apparel, accessories and novelties, with 37 stores in seven states as of January
30, 2010, for a preliminary purchase price of $13.9 million plus assumed debt of $1.6 million with $4.5 million of that
amount withheld until satisfaction of certain closing contingencies. Subsequently, in February 2010, $3.0 million of the
$4.5 million was paid. The Company allocated $6.2 million of the purchase price to goodwill. Finite-lived intangibles
include $1.4 million for trademarks, a $0.4 million asset and a $1.1 million liability to reflect the adjustment of acquired
57
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 4: acquisitions and intangible assets, continued
leases to market and $0.1 million for a non-compete agreement. The weighted average amortization period for the asset
to adjust acquired leases to market is 4.7 years. The goodwill related to Sports Fan-Attic is deductible for tax purposes.
G r e aT p l a i n s s p o r T s a c q u i s i T i o n
In the third quarter of Fiscal 2010, the Impact Sports division of Hat World acquired the assets of Great Plains Sports of
St. Paul, Minnesota, for a preliminary purchase price of $2.9 million plus assumed debt of $1.1 million with $0.6 million
withheld until satisfaction of certain closing contingencies. Great Plains Sports is a dealer of branded athletic and team
products for colleges, high schools, corporations and youth organizations and also operates a sporting goods store
in St. Paul, Minnesota. The Company allocated $1.1 million of the purchase price to goodwill. Finite-Lived intangibles
include $1.5 million for a customer list and $0.1 million for non-compete agreements. The goodwill related to Great
Plains Sports is deductible for tax purposes.
i m pa c T s p o r T s a c q u i s i T i o n
In the fourth quarter of Fiscal 2009, Hat World acquired the assets of Impact Sports, a dealer of branded athletic and
team products for college and high school teams, for a purchase price of $5.1 million plus assumed debt of $1.3 million
funded from borrowings under the Credit Facility. The Company allocated $4.0 million of the purchase price to goodwill.
Finite-lived intangibles include $1.0 million for customer relationships and $0.2 million for non-compete agreements.
The goodwill related to Impact Sports is deductible for tax purposes.
Other intangibles by major classes were as follows:
LeASeS
CuSToMer LISTS
non-CoMPeTe AgreeMenTS
ToTAL
In THouSAndS
Gross other intangibles
Accumulated amortization
net other Intangibles
Jan. 30, 2010
$ 9,267
(8,074)
$ 1,193
JAn. 31, 2009
$ 8,847
(7,590)
$ 1,257
jan. 30, 2010
$ 2,790
(461)
$ 2,329
JAn. 31, 2009
$ 1,290
(309)
$ 981
jan. 30, 2010
$ 408
(260)
$ 148
JAn. 31, 2009
$ 195
(57)
$ 138
JAn. 31, 2009
jan. 30, 2010
$ 12,465 $ 10,332
(7,956)
$ 3,670 $ 2,376
(8,795)
The amortization of intangibles was $0.9 million, $0.8 million and $1.3 million for Fiscal 2010, 2009 and 2008, respectively.
The amortization of intangibles will be $1.1 million, $0.9 million, $0.8 million, $0.7 million and $0.6 million for Fiscal 2011,
2012, 2013, 2014 and 2015, respectively.
note 5: restructuring and other charges and discontinued operations
r e s T r u c T u r i n G a n d o T h e r c h a r G e s
In accordance with Company policy, assets are determined to be impaired when the revised estimated future cash
flows are insufficient to recover the carrying costs. Impairment charges represent the excess of the carrying value over
the fair value of those assets.
Asset impairment charges are reflected as a reduction of the net carrying value of property and equipment, and in
restructuring and other, net in the accompanying Consolidated Statements of Operations.
The Company recorded a pretax charge to earnings of $13.5 million in Fiscal 2010. The charge reflected in restructuring
and other, net included $13.3 million for retail store asset impairments and $0.4 million for lease terminations offset by
$0.3 million for other legal matters. Also included in the charge was $0.1 million in excess markdowns related to the
lease terminations which is reflected in cost of sales on the Consolidated Statements of Operations.
The Company recorded a total pretax charge to earnings of $7.7 million in Fiscal 2009. The charge reflected in
restructuring and other, net included $8.6 million of charges for retail store asset impairments, $1.6 million for lease
terminations and $1.1 million for other legal matters, offset by a $3.8 million gain from a lease termination transaction.
Also included in the charge was $0.2 million in excess markdowns related to the store lease terminations which is
reflected in cost of sales on the Consolidated Statements of Operations.
The Company recorded a total pretax charge to earnings of $10.6 million in Fiscal 2008. The charge reflected in
restructuring and other, net included $8.7 million of charges for retail store asset impairments and $1.5 million for
lease terminations, offset by $0.5 million in excise tax refunds and an antitrust settlement. Also included in the charge
was $0.9 million in excess markdowns related to the lease terminations which is reflected in cost of sales on the
Consolidated Statements of Operations.
58
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
Genesco inc. AND SUBSIDIARIES
note 5: restructuring and other charges and discontinued operations, continued
d i s c o n T i n u e d o p e r aT i o n s
For the year ended January 30, 2010, the Company recorded an additional charge to earnings of $0.5 million ($0.3
million net of tax) reflected in discontinued operations, including $0.8 million primarily for anticipated costs of
environmental remedial alternatives related to former facilities operated by the Company offset by a $0.3 million gain
for excess provisions to prior discontinued operations (see Note 15).
For the year ended January 31, 2009, the Company recorded an additional charge to earnings of $9.0 million ($5.5
million net of tax) reflected in discontinued operations, including $9.4 million primarily for anticipated costs of
environmental remedial alternatives related to former facilities operated by the Company offset by a $0.4 million gain
for excess provisions to prior discontinued operations (see Note 15).
For the year ended February 2, 2008, the Company recorded an additional charge to earnings of $2.6 million ($1.6 million
net of tax) reflected in discontinued operations, including $2.9 million primarily for anticipated costs of environmental
remedial alternatives related to former facilities operated by the Company offset by a $0.3 million gain for excess
provisions to prior discontinued operations (see Note 15).
ACCrued ProvISIon For dISConTInued oPerATIonS
In THouSAndS
Balance February 2, 2008
Additional provision Fiscal 2009
Charges and adjustments, net
Balance January 31, 2009
Additional provision Fiscal 2010
Charges and adjustments, net
Balance January 30, 2010*
Current provision for discontinued operations
Total noncurrent Provision for discontinued operations
*Includes a $15.9 million environmental provision, including $9.9 million in current provision for discontinued operations.
FACILITY
SHuTdoWn
$
CoSTS
7,494
9,006
(932)
15,568
452
(606)
15,414
9,366
$ 6,048
note 6: inventories
I n T H o u S A n d S
Raw materials
Wholesale finished goods
Retail merchandise
Total Inventories
note 7: fair value
J A n u A r Y 3 0 ,
$
2 0 1 0
5,415
22,383
263,176
$ 290,974
$
J A N U A R Y 3 1 ,
2 0 0 9
2,059
44,155
259,864
$ 306,078
The Company adopted the Fair Value Measurements and Disclosures Topic of the Codification as of February 3, 2008,
with the exception of the application of the topic to non-recurring, nonfinancial assets and liabilities. The adoption
did not have a material impact on the Company’s results of operations or financial position. This Topic defines fair
value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles
and expands disclosures about fair value measurements. In February 2008, the FASB issued an amendment to the
Fair Value Topic, to delay the effective date for all nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring basis (that is, at least annually). The
Company adopted the amendment as of February 1, 2009.
The Fair Value Measurements and Disclosures Topic defines fair value as the exchange price that would be received
for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or
liability in an orderly transaction between market participants on the measurement date. It also establishes a fair value
59
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 7: fair value, continued
hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
L e v e L 1 – Quoted prices in active markets for identical assets or liabilities.
L e v e L 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted
prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market
data for substantially the full term of the assets or liabilities.
L e v e L 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value
of the assets or liabilities.
A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is
significant to the fair value measurement.
The following table presents the Company’s assets and liabilities measured at fair value on a nonrecurring basis
as of January 30, 2010 aggregated by the level in the fair value hierarchy within which those measurements fall
(in thousands):
Measured as of May 2, 2009
Measured as of August 1, 2009
Measured as of October 31,2009
Measured as of January 30, 2010
Lo n g - L I v e d
A S S e T S
H e L d A n d u S e d
$1,114
$1,430
$1,275
$1,227
L e v e L 1
L e v e L 2
L e v e L 3
$
$
$
$
-
-
-
-
$
$
$
$
-
-
-
-
$1,114
$1,430
$1,275
$1,227
T o TA L
Lo S S e S
$4,467
$3,372
$2,594
$2,879
In accordance with the Property, Plant and Equipment Topic of the Codification, the Company recorded $13.3 million of
impairment charges as a result of the fair value measurement of its long-lived assets held and used on a nonrecurring
basis during the twelve months ended January 30, 2010. These charges are reflected in restructuring and other, net
on the Consolidated Statements of Operations.
The Company used a discounted cash flow model to estimate the fair value of these long-lived assets at January
30, 2010. Discount rate and growth rate assumptions are derived from current economic conditions, expectations
of management and projected trends of current operating results. As a result, the Company has determined that the
majority of the inputs used to value its long-lived assets held and used are unobservable inputs that fall within Level 3
of the fair value hierarchy.
note 8: long-Term debt
I n T H o u S A n d S
4 1/8% convertible subordinated debentures due June 2023
Debt discount on 4 1/8% convertible subordinated debentures
Revolver borrowings
Total long-term debt
Current portion
Total noncurrent Portion of Long-Term debt*
2 0 1 0
2 0 0 9
$ -0-
$ 86,220
-0-
-0-
-0-
-0-
(4,785)
32,300
113,735
-0-
$ -0-
$ 113,735
*The Company adopted the provisions of the FASB’s Debt with Conversion and Other Options Sub-Topic of the Codification for its Debentures as of February 1, 2009.
The impact of the adoption is discussed in more detail in Note 2.
Long-term debt maturing during each of the next five years ending January is zero for each year.
c r e d i T fa c i l i T Y:
On December 1, 2006, the Company entered into an Amended and Restated Credit Agreement (the “Credit Facility”)
by and among the Company, certain subsidiaries of the Company party thereto, as other borrowers, the lenders party
thereto and Bank of America, N.A., as administrative agent. The Credit Facility expires December 1, 2011. The Credit
Facility replaced the Company’s $105.0 million revolving credit facility.
60
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 8: long-Term debt, continued
Deferred financing costs incurred of $1.2 million related to the Credit Facility were capitalized and are being amortized
over four years. These costs are included in other non-current assets on the Consolidated Balance Sheets.
The Company did not have any revolver borrowings outstanding under the Credit Facility at January 30, 2010. The
Company had outstanding letters of credit of $11.0 million under the facility at January 30, 2010. These letters of credit
support product purchases and lease and insurance indemnifications.
The material terms of the Credit Facility are as follows:
A V A I L A B I L I T Y
The Credit Facility is a revolving credit facility in the aggregate principal amount of $200.0 million, with a $20.0 million
swingline loan sublimit and a $70.0 million sublimit for the issuance of standby letters of credit, and has a five-year term.
Any swingline loans and letters of credit will reduce the availability under the Credit Facility on a dollar-for-dollar basis.
In addition, the Company has an option to increase the availability under the Credit Facility by up to $100.0 million (in
increments no less than $25.0 million) subject to, among other things, the receipt of commitments for the increased
amount. The aggregate amount of the loans made and letters of credit issued under the Restated Credit Agreement
shall at no time exceed the lesser of the facility amount ($200.0 million or, if increased at the Company’s option, up
to $300.0 million) or the “Borrowing Base”, which generally is based on 85% of eligible inventory plus 85% of eligible
accounts receivable less applicable reserves.
C O L L AT E R A L
The loans and other obligations under the Credit Facility are secured by substantially all of the presently owned and
hereafter acquired non-real estate assets of the Company and certain subsidiaries of the Company.
I N T E R E S T A N D F E E S
The Company’s borrowings under the Credit Facility bear interest at varying rates that, at the Company’s option, can
be based on either:
• a base rate generally defined as the sum of the prime rate of Bank of America, N.A. and an applicable margin.
• a LIBO rate generally defined as the sum of LIBOR (as quoted on the British Banking Association Telerate Page
3750) and an applicable margin.
The initial applicable margin for base rate loans was 0.00%, and the initial applicable margin for LIBOR loans was 1.00%.
Thereafter, the applicable margin will be subject to adjustment based on “Excess Availability” for the prior quarter. As of
January 30, 2010, the margin for LIBOR loans was 1.00%. The term “Excess Availability” means, as of any given date,
the excess (if any) of the Borrowing Base over the outstanding credit extensions under the Credit Facility.
Interest on the Company’s borrowings is payable monthly in arrears for base rate loans and at the end of each interest
rate period (but not less often than quarterly) for LIBOR loans.
The Company is also required to pay a commitment fee on the difference between committed amounts and the
aggregate amount (including the aggregate amount of letters of credit) of the credit extensions outstanding under
the Credit Facility, which initially was 0.25% per annum, subject to adjustment in the same manner as the applicable
margins for interest rates.
C E R TA I N C O V E N A N T S
The Company is not required to comply with any financial covenants unless Adjusted Excess Availability is less than
10% of the total commitments under the Credit Facility (currently $20.0 million). The term “Adjusted Excess Availability”
means, as of any given date, the excess (if any) of (a) the lesser of the total commitments under the Credit Facility
and the Borrowing Base over (b) the outstanding credit extensions under the Credit Facility. If and during such time
as Adjusted Excess Availability is less than such amount, the Credit Facility requires the Company to meet a minimum
fixed charge coverage ratio (EBITDA less capital expenditures less cash taxes divided by cash interest expense and
scheduled payments of principal indebtedness) of 1.00 to 1.00. Because Adjusted Excess Availability exceeded $20.0
million, the Company was not required to comply with this financial covenant at January 30, 2010.
61
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 8: long-Term debt, continued
In addition, the Credit Facility contains certain covenants that, among other things, restrict additional indebtedness, liens
and encumbrances, loans and investments, acquisitions, dividends and other restricted payments, transactions with
affiliates, asset dispositions, mergers and consolidations, prepayments or material amendments of other indebtedness
and other matters customarily restricted in such agreements.
C A S H D O M I N I O N
The Credit Facility also contains cash dominion provisions that apply in the event that the Company’s Adjusted Excess
Availability fails to meet certain thresholds or there is an event of default under the Credit Facility.
E V E N T S O F D E FA U LT
The Credit Facility contains customary events of default, including, without limitation, payment defaults, breaches of
representations and warranties, covenant defaults, cross-defaults to certain other material indebtedness in excess
of specified amounts, certain events of bankruptcy and insolvency, certain ERISA events, judgments in excess of
specified amounts and change in control.
Certain of the lenders under the Credit Facility or their affiliates have provided, and may in the future provide, certain
commercial banking, financial advisory, and investment banking services in the ordinary course of business for the
Company, its subsidiaries and certain of its affiliates, for which they receive customary fees and commissions.
4 1 / 8 % c o n v e r T i B l e s u B o r d i n aT e d d e B e n T u r e s d u e 2 0 2 3 :
On June 24, 2003 and June 26, 2003, the Company issued a total of $86.3 million of 4 1/8% Convertible Subordinated
Debentures (the “Debentures”) due June 15, 2023. The Debentures were convertible at the option of the holders into
shares of the Company’s common stock, par value $1.00 per share: (1) in any quarter in which the price of its common
stock issuable upon conversion of a Debenture reached 120% or more of the conversion price ($24.07 or more) for 10
of the last 30 trading days of the immediately preceding fiscal quarter, (2) if specified corporate transactions occurred
or (3) if the trading price for the Debentures fell below certain thresholds. Upon conversion, the Company would have
the right to deliver, in lieu of its common stock, cash or a combination of cash and shares of its common stock. Subject
to the above conditions, each $1,000 principal amount of Debentures was convertible into 49.8462 shares (equivalent
to a conversion price of $20.06 per share of common stock) subject to adjustment. There were $30,000 of debentures
converted to 1,356 shares of common stock during Fiscal 2008.
On April 29, 2009, the Company entered into separate exchange agreements whereby it acquired and retired $56.4
million in aggregate principal amount ($51.3 million fair value) of its Debentures due June 15, 2023 in exchange for the
issuance of 3,066,713 shares of its common stock, which include 2,811,575 shares that were reserved for conversion
of the Debentures and 255,138 additional inducement shares, and a cash payment of approximately $0.9 million. The
inducement was not deductible for tax purposes. During the fourth quarter of Fiscal 2010, holders of an aggregate
of $21.04 million principal amount of its 4 1/8% Convertible Subordinated Debentures were converted to 1,048,764
shares of common stock pursuant to separate conversion agreements which provided for payment of an aggregate
of $0.3 million to induce conversion. On November 4, 2009, the Company issued a notice of redemption to the
remaining holders of the $8.775 million outstanding 4 1/8% Convertible Subordinated Debentures. As permitted by the
Indenture, holders of all except $1,000 in principal amount of the remaining Debentures converted their Debentures
to 437,347 shares of common stock prior to the redemption date of December 3, 2009. As a result of the exchange
agreements and conversions, the Company recognized a loss on the early retirement of debt of $5.5 million in Fiscal
2010, reflected on the Consolidated Statements of Operations. After the exchanges and conversions there was zero
aggregate principal amount of Debentures outstanding.
The Company paid cash interest on the debentures at an annual rate of 4.125% of the principal amount at issuance,
payable on June 15 and December 15 of each year, commencing on December 15, 2003. The Company was required
to pay contingent interest (in the amounts set forth in the Debentures) to holders of the Debentures during any six-month
period from and including an interest payment date to, but excluding, the next interest payment date, commencing with
the six-month period ending December 15, 2008, if the average trading price of the Debentures for the five consecutive
trading day measurement period immediately preceding the applicable six-month period equaled 120% or more of the
62
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 8: long-Term debt, continued
principal amount of the Debentures. This contingency was satisfied during the six-month period ended December 15,
2008. As a result, the Company paid $0.1 million in contingent interest on December 15, 2008. No contingent interest
was paid with the June 15, 2009 interest payment.
Deferred financing costs of $2.9 million relating to the issuance were initially capitalized and being amortized over seven
years. As a result of adoption of the FASB’s Debt with Conversion and Other Options Sub-Topic of the Codification,
$0.7 million was reclassified from deferred note expense to additional paid-in capital. Due to the exchanges and
conversions, deferred financing costs of $0.3 million were written off and included in loss on early retirement of debt in
the Consolidated Statements of Operations.
note 9: commitments under long-Term leases
o p e r aT i n G l e a s e s
The Company leases its office space and all of its retail store locations and transportation equipment under various
noncancelable operating leases. The leases have varying terms and expire at various dates through 2024. The store
leases typically have initial terms of between 5 and 10 years. Generally, most of the leases require the Company to
pay taxes, insurance, maintenance costs and contingent rentals based on sales. Approximately 2% of the Company’s
leases contain renewal options.
Rental expense under operating leases of continuing operations was:
In THouSAndS
Minimum rentals
Contingent rentals
Sublease rentals
Total rental expense
Minimum rental commitments payable in future years are:
FISCAL YeArS
2011
2012
2013
2014
2015
Later years
Total minimum rental commitments
2010
$ 159,553
4,780
(652)
$ 163,681
2009
$ 156,241
3,722
(763)
$ 159,200
2008
$ 145,763
4,221
(806)
$ 149,178
In THouSAndS
$ 167,739
156,424
142,148
129,605
116,569
264,327
$ 976,812
For leases that contain predetermined fixed escalations of the minimum rentals, the related rental expense is
recognized on a straight-line basis and the cumulative expense recognized on the straight-line basis in excess of the
cumulative payments is included in deferred rent and other long-term liabilities on the Consolidated Balance Sheets.
The Company occasionally receives reimbursements from landlords to be used towards construction of the store the
Company intends to lease. Leasehold improvements are recorded at their gross costs including items reimbursed
by landlords. The reimbursements are amortized as a reduction of rent expense over the initial lease term. Tenant
allowances of $22.1 million and $24.6 million for Fiscal 2010 and 2009, respectively, and deferred rent of $31.1 million
and $29.0 million for Fiscal 2010 and 2009, respectively, are included in deferred rent and other long-term liabilities
on the Consolidated Balance Sheets.
63
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 10: shareholders’ equity
n o n - r e d e e m a B l e p r e f e r r e d s T o c k
SHARES
NUMBER OF SHARES
AMOUNTS IN THOUSANDS ConverTIBLe
no oF
CoMMon
2010
2009
2008
2010
2009
2008
rATIo
voTeS
CLASS (IN ORDER OF PREFERENCE)*
AUTHORIZED
Subordinated Serial Preferred (Cumulative)
Aggregate
3,000,000**
-
64,368 33,497
40,449 12,326
3,579
53,764
-0-
800,000
-
33,538
12,326
3,579
-0-
-
-
33,658 $1,340
1,233
12,326
358
3,579
-0-
-0-
-
$1,342
1,233
358
-0-
-
$1,346
1,233
358
-0-
N/A
.83
2.11
1.52
$2.30 Series 1
$4.75 Series 3
$4.75 Series 4
Series 6
$1.50 Subordinated
Cumulative Preferred
N/A
1
2
1
100
1
5,000,000 30,067
79,469
30,017
79,460
30,017
79,580
902
3,833
900
3,833
900
3,837
Employees’ Subordinated
Convertible Preferred
Stated Value of Issued Shares
Employees’ Preferred Stock Purchase Accounts
Total non-redeemable preferred stock
5,000,000 50,350
*In order of preference for liquidation and dividends.
50,079
54,825
1,510
5,343
(123)
$5,220
1,502
5,335
(132)
$5,203
1,645
5,482
(144)
$5,338
1.00***
1
**The Company’s charter permits the board of directors to issue Subordinated Serial Preferred Stock in as many series, each with as many shares and
such rights and preferences as the board may designate.
***Also convertible into one share of $1.50 Subordinated Cumulative Preferred Stock.
P r e F e r r e d S T o C k T r A n S A C T I o n S
In THouSAndS
Balance February 3, 2007
Conversion of Series 3
Conversion of Series 4
Other
Balance February 2, 2008
Other
Balance January 31, 2009
Other
Balance january 30, 2010
NON-REDEEMABLE
EMPLOYEES’
TOTAL
NON-REDEEMABLE
EMPLOYEES’
PREFERRED STOCK
NON-REDEEMABLE
PREFERRED STOCK
$5,026
PREFERRED STOCK
$1,750
PURCHASE ACOUNTS
$(174)
PREFERRED STOCK
$6,602
(533)
(561)
(95)
3,837
(4)
3,833
-0-
-0-
(105)
1,645
(143)
1,502
-0-
-0-
30
(144)
12
(132)
(533)
(561)
(170)
5,338
(135)
5,203
-0-
$3,833
8
$1,510
9
$(123)
17
$5,220
s u B o r d i n aT e d s e r i a l p r e f e r r e d s T o c k ( c u m u l aT i v e ) :
Stated and redemption values for Series 1 are $40 per share and for Series 3 and 4 are each $100 per share plus
accumulated dividends; liquidation value for Series 1 is $40 per share plus accumulated dividends and for Series 3 and
4 is $100 per share plus accumulated dividends.
The Company’s shareholders’ rights plan grants to common shareholders the right to purchase, at a specified exercise
price, a fraction of a share of subordinated serial preferred stock, Series 6, in the event of an acquisition of, or an
announced tender offer for, 15% or more of the Company’s outstanding common stock. Upon any such event, each
right also entitles the holder (other than the person making such acquisition or tender offer) to purchase, at the exercise
price, shares of common stock having a market value of twice the exercise price. In the event the Company is acquired
in a transaction in which the Company is not the surviving corporation, each right would entitle its holder to purchase,
at the exercise price, shares of the acquiring company having a market value of twice the exercise price. The rights
expire in August 2010, are redeemable under certain circumstances for $.01 per right and are subject to exchange for
one share of common stock or an equivalent amount of preferred stock at any time after the event which makes the
rights exercisable and before a majority of the Company’s common stock is acquired.
64
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 10: shareholders’ equity, continued
$ 1 . 5 0 s u B o r d i n aT e d c u m u l aT i v e p r e f e r r e d s T o c k :
Stated and liquidation values and redemption price are 88 times the average quarterly per share dividend paid on
common stock for the previous eight quarters (if any), but in no event less than $30 per share plus accumulated dividends.
e m p lo Y e e s ’ s u B o r d i n aT e d c o n v e r T i B l e p r e f e r r e d s T o c k :
Stated and liquidation values are 88 times the average quarterly per share dividend paid on common stock for the
previous eight quarters (if any), but in no event less than $30 per share.
c o m m o n s T o c k :
Common stock – $1 par value. Authorized: 80,000,000 shares; issued: January 30, 2010 – 24,562,693 shares;
January 31, 2009 –19,731,979 shares. There were 488,464 shares held in treasury at January 30, 2010 and January 31, 2009.
Each outstanding share is entitled to one vote. At January 30, 2010, common shares were reserved as follows: 109,635
shares for conversion of preferred stock; 815,431 shares for the 1996 Stock Incentive Plan; 180,149 shares for the 2005
Stock Incentive Plan; 817,376 shares for the 2009 Stock Incentive Plan; and 322,848 shares for the Genesco Employee
Stock Purchase Plan.
For the year ended January 30, 2010, 28,500 shares of common stock were issued for the exercise of stock options
at an average weighted market price of $14.04, for a total of $0.4 million; 383,745 shares of common stock were
issued as restricted shares as part of the 2009 Equity Incentive Plan; 4,350 shares of common stock were issued
for the purchase of shares under the Employee Stock Purchase Plan at an average weighted market price of
$22.87, for a total of $0.1 million; 21,204 shares were issued to directors for no consideration; 65,299 shares were
withheld for taxes on restricted stock vested in Fiscal 2010; 11,951 shares of restricted stock were forfeited in Fiscal
2010; 4,552,824 shares of common stock were issued in conversions of the Debentures; and 2,341 shares were
issued in miscellaneous conversions of Series 1 and Employees’ Subordinated Convertible Preferred Stock. The
28,500 options exercised were all fixed stock options (see Note 14). In addition, the Company repurchased and
retired 85,000 shares of common stock at an average weighted market price of $23.84 for a total of $2.0 million.
For the year ended January 31, 2009, 82,868 shares of common stock were issued for the exercise of stock options at
an average weighted market price of $17.35, for a total of $1.4 million; 397,273 shares of common stock were issued
as restricted shares as part of the 2005 Equity Incentive Plan; 1,711 shares of common stock were issued for the
purchase of shares under the Employee Stock Purchase Plan at an average weighted market price of $31.81, for a total
of $0.1 million; 18,792 shares were issued to directors for no consideration; 52,969 shares were withheld for taxes on
restricted stock vested in Fiscal 2009; 5,189 shares of restricted stock were forfeited in Fiscal 2009; and 4,752 shares
were issued in miscellaneous conversions of Series 1 and Employees’ Subordinated Convertible Preferred Stock. The
82,868 options exercised were all fixed stock options (see Note 14). In addition, the Company repurchased and retired
4,000,000 shares of common stock at an average weighted market price of $22.73 for a total of $90.9 million.
For the year ended February 2, 2008, 32,751 shares of common stock were issued for the exercise of stock options at
an average weighted market price of $17.83, for a total of $0.6 million; 3,547 shares of common stock were issued as
restricted shares as part of the 2005 Equity Incentive Plan; 4,813 shares of common stock were issued for the purchase
of shares under the Employee Stock Purchase Plan at an average weighted market price of $43.82, for a total of $0.2
million; 6,761 shares were issued to directors for no consideration; 19,397 shares were withheld for taxes on restricted
stock vested in Fiscal 2008; 686 shares of restricted stock were forfeited in Fiscal 2008; and 26,494 shares were issued
in miscellaneous conversions of Series 1, Series 3, Series 4, Employees’ Subordinated Convertible Preferred Stock and
Debentures. The 32,751 options exercised were all fixed stock options (see Note 14).
r e s T r i c T i o n s o n d i v i d e n d s a n d r e d e m p T i o n s o f c a p i Ta l s T o c k :
The Company’s charter provides that no dividends may be paid and no shares of capital stock acquired for value if
there are dividend or redemption arrearages on any senior or equally ranked stock. Exchanges of subordinated serial
preferred stock for common stock or other stock junior to such exchanged stock are permitted.
65
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 10: shareholders’ equity, continued
The Company’s Credit Facility prohibits the payment of dividends and other restricted payments unless after such
dividend or restricted payment availability under the Credit Facility exceeds $50.0 million or if availability is between
$30.0 million and $50.0 million, the Company’s fixed charge coverage must be greater than 1.0 to 1.0. The Company’s
management does not believe its availability under the Credit Facility will fall below $50.0 million during Fiscal 2011.
Dividends declared for Fiscal 2010 for the Company’s Subordinated Serial Preferred Stock, $2.30 Series 1, $4.75 Series 3
and $4.75 Series 4, and the Company’s $1.50 Subordinated Cumulative Preferred Stock were $198,000 in the aggregate.
C H A n g e S I n T H e S H A r e S o F T H e C o M PA n Y ’ S C A P I TA L S T o C k
NON-REDEEMABLE
COMMON
PREFERRED
EMPLOYEES’
PREFERRED
Issued at February 3, 2007
Exercise of options
Issue restricted stock
Issue shares – Employee Stock Purchase Plan
Conversion of Series 3 preferred stock
Conversion of Series 4 preferred stock
Other
Issued at February 2, 2008
Exercise of options
Issue restricted stock
Issue shares – Employee Stock Purchase Plan
Shares repurchased
Other
Issued at January 31, 2009
Exercise of options
Issue restricted stock
Issue shares – Employee Stock Purchase Plan
Conversion of 4 1/8% Debentures
Shares repurchased
Other
Issued at January 30, 2010
Less shares repurchased and held in treasury
outstanding at January 30, 2010
STOCK
23,230,458
32,751
3,547
4,813
11,251
8,519
(6,598)
23,284,741
82,868
397,273
1,711
(4,000,000)
(34,614)
19,731,979
28,500
404,949
4,350
4,552,824
(85,000)
(74,909)
24,562,693
488,464
24,074,229
STOCK
92,906
-0-
-0-
-0-
(5,334)
(5,605)
(2,387)
79,580
-0-
-0-
-0-
-0-
(120)
79,460
-0-
-0-
-0-
-0-
-0-
9
79,469
-0-
79,469
STOCK
58,328
-0-
-0-
-0-
-0-
-0-
(3,503)
54,825
-0-
-0-
-0-
-0-
(4,746)
50,079
-0-
-0-
-0-
-0-
-0-
271
50,350
-0-
50,350
66
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 11: income Taxes
Income tax expense from continuing operations is comprised of the following:
I n T H o u S A n d S
Current
U.S. federal
Foreign
State
Total Current Income Tax Expense
Deferred
U.S. federal
Foreign
State
Total Deferred Income Tax Expense (Benefit)
Total income Tax expense – continuing operations
2 0 1 0
2 0 0 9
2 0 0 8
$ 14,261
1,680
1,781
17,722
4,943
-0-
(1,263)
3,680
$ 21,402
$ 73,781
1,837
12,228
87,846
5,429
324
896
6,649
$ 94,495
$ 30,625
1,351
4,954
36,930
(11,655)
(230)
(1,899)
(13,784)
$ 23,146
Discontinued operations were recorded net of income tax benefit of approximately ($0.2) million, ($3.5) million and
$(1.0) million in Fiscal 2010, 2009 and 2008, respectively.
As a result of the exercise of stock options and vesting of restricted stock during Fiscal 2010, 2009 and 2008, the
Company realized an additional income tax (expense) benefit of approximately ($0.7) million, ($0.6) million and $0.7
million, respectively. These tax benefits (expenses) are reflected as an adjustment to either additional paid-in capital
or deferred tax asset.
Deferred tax assets and liabilities are comprised of the following:
J A n u A r Y 3 0 ,
J A N U A R Y 3 1 ,
I n T H o u S A n d S
Identified intangibles
Prepaids
Convertible bonds
Total deferred tax liabilities
Options
Deferred rent
Pensions
Expense accruals
Uniform capitalization costs
Book over tax depreciation
Provisions for discontinued operations and restructurings
Inventory valuation
Tax net operating loss and credit carryforwards
Allowances for bad debts and notes
Deferred compensation and restricted stock
Other
Deferred tax assets
net deferred Tax Assets
2 0 1 0
$ (20,011)
(2,386)
(3,011)
(25,408)
2,027
10,050
6,434
6,606
6,804
5,444
6,594
3,471
752
592
3,580
3,913
56,267
$ 30,859
The deferred tax balances have been classified in the Consolidated Balance Sheets as follows:
Net current asset
Net non-current asset
net deferred Tax Assets
2 0 1 0
$ 17,314
13,545
$ 30,859
2 0 0 9
$ (20,317)
(2,329)
(11,879)
(34,525)
1,972
9,768
8,595
4,983
4,901
7,909
6,413
3,943
141
517
2,169
3,599
54,910
$ 20,385
2 0 0 9
$ 15,083
5,302
$ 20,385
67
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 11: income Taxes, continued
Reconciliation of the United States federal statutory rate to the Company’s effective tax rate from continuing operations
is as follows:
U.S. federal statutory rate of tax
State taxes (net of federal tax benefit)
Transaction costs
Bond costs
Permanent items
Other
effective Tax rate
2 0 1 0
35.00%
1.05
–
4.7
.75
.89
42.39%
2 0 0 9
35.00%
3.47
(3.68)
–
3.28
(.37)
37.70%
2 0 0 8
35.00%
6.40
32.66
–
2.20
1.10
77.36%
The provision for income taxes resulted in an effective tax rate for continuing operations of 42.4% for Fiscal 2010,
compared with an effective tax rate of 37.7% for Fiscal 2009. The increase in the effective tax rate for Fiscal 2010
was primarily attributable to the non-deductibility of certain items incurred in connection with the inducement of the
conversion of the Debentures for common stock this year and by the deduction last year of prior period merger-related
expenses that became deductible upon termination of the Finish Line merger agreement. This was offset by an income
tax liability on an increase in value of shares of common stock received in the settlement of litigation with The Finish
Line that had no corresponding income in the financial statements. In addition, last year’s effective rate was lower due
to a $1.2 million reduction in tax liabilities from an agreement reached on a state income tax contingency.
As of January 30, 2010, January 31, 2009 and February 2, 2008, the Company had state net operating loss carryforwards
of $0.4 million, $0 and $5.8 million, respectively, which expire in fiscal years 2015 through 2030.
As of January 30, 2010, January 31, 2009 and February 2, 2008, the Company had state tax credits of $0.1 million, $0.1
million and $0, respectively. These credits expire in fiscal year 2024.
As of January 30, 2010, January 31, 2009 and February 2, 2008, the Company had foreign tax credits of $0.4 million,
$0.1 million and $0.7 million, respectively. These credits will expire in fiscal year 2020.
Management believes a valuation allowance is not necessary because it is more likely than not that the Company will
ultimately utilize the credits and other deferred tax assets based on existing carryback ability and expectations as to
future taxable income in the jurisdictions in which it operates.
As of January 30, 2010, the Company has not provided for withholding or United States federal income taxes on
approximately $4.7 million of accumulated undistributed earnings of its foreign Canadian subsidiary as they are
considered by management to be permanently reinvested. If these undistributed earnings were not considered to be
permanently reinvested, approximately $1.9 million deferred income taxes would have been provided.
The methodology in the Income Tax Topic of the Codification prescribes that a company should use a more-likely-than-
not recognition threshold based on the technical merits of the tax position taken. Tax positions that meet the more-
likely-than-not recognition threshold should be measured in order to determine the tax benefit to be recognized in the
financial statements.
The Company adopted this methodology as of February 4, 2007. As a result of the adoption, the Company recognized
a $4.3 million increase in the liability for unrecognized tax benefits which, as required, was accounted for as a reduction
to the February 4, 2007 balance of retained earnings.
The following is a tabular reconciliation of the total amounts of unrecognized tax benefits for Fiscal 2010, 2009 and 2008.
I n T H o u S A n d S
Unrecognized Tax Benefit – Beginning of Period
Gross Increases (Decreases) – Tax Positions
in a Prior Period
Gross Increases – Tax Positions in a Current Period
Settlements
Lapse of Statues of Limitations
unrecognized Tax Benefit – end of period
2 0 1 0
$ 13,456
4,306
327
(445)
(640)
$ 17,004
68
2 0 0 9
$ 4,899
(214)
10,229
(1,184)
(274)
$ 13,456
2 0 0 8
$ 8,175
(3,370)
414
(247)
(73)
$ 4,899
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 11: income Taxes, continued
In addition, the following information is required to be provided:
• Unrecognized tax benefits were approximately $17.0 million, $13.5 million and $4.9 million as of January 30, 2010,
January 31, 2009 and February 2, 2008, respectively. The entire amount of unrecognized tax benefits as of January
30, 2010, January 31, 2009 and February 2, 2008 would impact the annual effective rate if recognized. The amount of
unrecognized tax benefits may change during the next twelve months, but the Company does not believe the change,
if any, will be material to the Company’s consolidated financial position or results of operations.
• The Company recognizes interest expense and penalties related to the above unrecognized tax benefits within
income tax expense on the Consolidated Statements of Operations. Related to the uncertain tax benefits noted above,
the Company accrued interest and penalties of approximately $0.8 million and ($0.1) million, respectively, during
Fiscal 2010, $0.2 million and ($0.3), respectively, during Fiscal 2009 and $0.5 million and $4,000, respectively, during
Fiscal 2008. The Company recognized a liability for accrued interest and penalities of $2.3 million and $0.4 million,
respectively, as of January 30, 2010 and $1.5 million and $0.5 million, respectively, as of January 31, 2009, included
in deferred rent and other long-term liabilities on the Consolidated Balance Sheets.
• Income tax reserves are determined using the methodology required by the Income Tax Topic of the Codification.
• The Company and its subsidiaries file income tax returns in federal and in many state and local jurisdictions as well
as foreign jurisdictions. With a few exceptions, the Company’s state and local income tax returns for fiscal years 2006
and beyond remain subject to examination. In addition, the Company has subsidiaries in various foreign jurisdictions
that have statutes of limitation generally ranging from three to six years. The Company is currently under audit by the
Internal Revenue Service for Fiscal 2005 through 2009, and has filed a statute waiver for Fiscal 2005.
note 12: defined Benefit pension plans and other postretirement Benefit plans
d e f i n e d B e n e f i T p e n s i o n p l a n s
The Company sponsored a non-contributory, defined benefit pension plan. As of January 1, 1996, the Company
amended the plan to change the pension benefit formula to a cash balance formula from the then existing benefit
calculation based upon years of service and final average pay. The benefits accrued under the old formula were frozen
as of December 31, 1995. Upon retirement, the participant will receive this accrued benefit payable as an annuity. In
addition, the participant will receive as a lump sum (or annuity if desired) the amount credited to the participant’s
cash balance account under the new formula. Effective January 1, 2005, the Company froze the defined benefit cash
balance plan which prevents any new entrants into the plan as of that date as well as affects the amounts credited to
the participants’ accounts as discussed below.
Under the cash balance formula, beginning January 1, 1996, the Company credited each participants’ account annually
with an amount equal to 4% of the participant’s compensation plus 4% of the participant’s compensation in excess of
the Social Security taxable wage base. Beginning December 31, 1996 and annually thereafter, the account balance of
each active participant was credited with 7% interest calculated on the sum of the balance as of the beginning of the
plan year and 50% of the amounts credited to the account, other than interest, for the plan year. The account balance
of each participant who was inactive would be credited with interest at the lesser of 7% or the 30 year Treasury rate.
Under the frozen plan, each participants’ cash balance plan account will be credited annually only with interest at the
30 year Treasury rate, not to exceed 7%, until the participant retires. The amount credited each year will be based on
the rate at the end of the prior year.
o T h e r p o s T r e T i r e m e n T B e n e f i T p l a n s
The Company provides health care benefits for early retirees and life insurance benefits for certain retirees not covered
by collective bargaining agreements. Under the health care plan, early retirees are eligible for limited benefits until age
65. Employees who meet certain requirements are eligible for life insurance benefits upon retirement. The Company
accrues such benefits during the period in which the employee renders service.
69
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 12: defined Benefit pension plans and other postretirement Benefit plans, continued
o B L I g AT I o n S A n d F u n d e d S TAT u S
CHAnge In BeneFIT oBLIgATIon
In THouSAndS
Benefit obligation at beginning of year
Service cost
Interest cost
Adjustment of measurement date*
Plan amendments
Plan participants’ contributions
Benefits paid
Actuarial loss or (gain)
Benefit obligation at end of Year
CHAnge In PLAn ASSeTS
In THouSAndS
Fair value of plan assets at beginning of year
Actual gain (loss) on plan assets
Adjustment of measurement date*
Employer contributions
Plan participants’ contributions
Benefits paid
fair value of plan assets at end of Year
PenSIon BeneFITS
oTHer BeneFITS
2010
$ 99,436
250
6,562
-0-
-0-
-0-
(9,319)
12,842
$ 109,771
2009
$ 113,990
250
6,318
(202)
(22)
-0-
(9,224)
(11,674)
$ 99,436
2010
$ 3,078
120
170
-0-
-0-
99
(267)
26
$ 3,226
2009
$ 3,073
134
163
18
-0-
123
(324)
(109)
$ 3,078
PenSIon BeneFITS
oTHer BeneFITS
2010
$ 73,468
21,220
-0-
4,000
-0-
(9,319)
$ 89,369
2009
$ 107,418
(27,977)
(749)
4,000
-0-
(9,224)
$ 73,468
2010
-0-
-0-
-0-
168
99
(267)
-0-
$
$
2009
-0-
-0-
-0-
201
123
(324)
-0-
$
$
funded status at end of Year
$ (20,402)
$ (25,968)
$ (3,226)
$ (3,078)
*The Company adopted the measurement date change required by the Compensation-Retirement Benefits Topic of the Codification as of January 31, 2009.
This update to the Codification required the Company to change the measurement date for its defined benefit pension plan and postretirement benefit plan
from December 31 to January 31 (end of fiscal year). As a result of this change, pension expense and actuarial gains/losses for the one-month period
ended January 31, 2009 were recognized as adjustments to retained earnings and accumulated other comprehensive loss, respectively, net of tax.
Amounts recognized in the Consolidated Balance Sheets consist of:
PenSIon BeneFITS
oTHer BeneFITS
In THouSAndS
Noncurrent assets
Current liabilities
Noncurrent liabilities
net amount recognized
$
2010
-0-
-0-
(20,402)
$ (20,402)
$
2009
-0-
-0-
(25,968)
$ (25,968)
$
2010
-0-
(278)
(2,948)
$ (3,226)
2009
$
$
-0-
(271)
(2,807)
(3,078)
Amounts recognized in accumulated other comprehensive income consist of:
In THouSAndS
Prior service cost
Net loss
Total recognized in accumulated other
comprehensive loss
PenSIon BeneFITS
oTHer BeneFITS
2010
$
12
47,718
2009
$
16
49,494
$
2010
-0-
41
$
2009
-0-
65
$ 47,730
$ 49,510
$
41
$
65
PenSIon BeneFITS
In THouSAndS
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets
JAnuArY 30,
JANUARY 31,
2010
$ 109,771
109,771
89,369
2009
$ 99,436
99,436
73,468
70
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 12: defined Benefit pension plans and other postretirement Benefit plans, continued
C o M P o n e n T S o F n e T P e r I o d I C B e n e F I T C o S T
Genesco inc. AND SUBSIDIARIES
n e T p e r i o d i c B e n e f i T c o s T
In THouSAndS
Service cost
Interest cost
Expected return on plan assets
Amortization:
Prior service cost
Losses
Net amortization
net periodic Benefit cost
PENSION BENEFITS
2009
2010
2008
$ 250 $ 250 $ 250
6,451
6,318
6,562
(8,024)
(8,354) (8,569)
$
OTHER BENEFITS
2009
$ 134
163
-0-
2008
$ 123
159
-0-
2010
120
170
-0-
4
4
8
1,751
3,361
4,418
4,426
3,365
1,755
$ 213 $ 1,364 $ 3,103
-0-
50
50
$ 340
-0-
80
80
$ 377
-0-
93
93
$ 375
r e C o n C I L I AT I o n o F A C C u M u L AT e d o T H e r C o M P r e H e n S I v e I n C o M e
In THouSAndS
Net loss (gain)
Amortization of prior service (cost) credit
Amortization of net actuarial loss
PenSIon BeneFITS
2010
(24)
(4)
(1,751)
$
oTHer BeneFITS
2010
$ (50)
-0-
26
Total recognized in other comprehensive income
(1,779)
(24)
Total recognized in net periodic Benefit cost and
other comprehensive income
$ (1,566)
$ 316
The estimated net loss and prior service cost for the defined benefit pension plans that will be amortized from
accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $4.5 million and
$4,000, respectively. The estimated net loss for the other postretirement benefit plans that will be amortized from
accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $0.1 million.
W e I g H T e d - A v e r A g e A S S u M P T I o n S u S e d T o d e T e r M I n e B e n e F I T o B L I g AT I o n S
Discount rate
Rate of compensation increase
PenSIon BeneFITS
oTHer BeneFITS
2010
5.625%
nA
2009
6.875%
NA
2010
5.50%
-
2009
6.375%
-
For Fiscal 2010 and 2009, the discount rate was based on a yield curve of high quality corporate bonds with cash flows
matching the Company’s plans’ expected benefit payments. For Fiscal 2008, the discount rate was based on a hypothetical
portfolio of high quality corporate bonds with cash flows matching the Company’s plans’ expected benefit payments.
W e I g H T e d - A v e r A g e A S S u M P T I o n S u S e d T o d e T e r M I n e n e T P e r I o d I C B e n e F I T C o S T S
Discount rate
Expected long-term rate of return on
plan assets
Rate of compensation increase
PenSIon BeneFITS
2009
2010
6.875% 5.875%
2008
5.75%
2010
oTHer BeneFITS
2009
6.375% 5.875% 5.75%
2008
8.25%
nA
8.25%
NA
8.25%
NA
-
-
-
-
-
-
The weighted average discount rate used to measure the benefit obligation for the pension plan decreased from 6.875%
to 5.625% from Fiscal 2009 to Fiscal 2010. The decrease in the rate increased the accumulated benefit obligation
by $12.3 million and increased the projected benefit obligation by $12.3 million. The weighted average discount rate
used to measure the benefit obligation for the pension plan increased from 5.875% to 6.875% from Fiscal 2008 to
Fiscal 2009. The increase in the rate decreased the accumulated benefit obligation by $10.0 million and decreased the
projected benefit obligation by $10.0 million.
71
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 12: defined Benefit pension plans and other postretirement Benefit plans, continued
To develop the expected long-term rate of return on assets assumption, the Company considered historical asset
returns, the current asset allocation and future expectations. Considering this information, the Company selected an
8.25% long-term rate of return on assets assumption.
A S S u M e d H e A LT H C A r e C o S T T r e n d r AT e S AT d e C e M B e r 3 1
Health care cost trend rate assumed for next year
Rate to which the cost trend rate is assumed to decline
(the ultimate trend rate)
Year that the rate reaches the ultimate trend rate
2010
10%
5%
2020
2009
9%
5%
2013
The effect on disclosed information of one percentage point change in the assumed health care cost trend rate for each
future year is shown below.
(In THouSAndS)
Aggregated service and interest cost
Accumulated postretirement benefit obligation
P L A n A S S e T S
1% Increase
1% Decrease
in Rates
$ 45
$ 377
in Rates
$ 36
$ 314
The Company’s pension plan weighted average asset allocations as of January 30, 2010 and January 31, 2009, by
asset category are as follows:
ASSeT CATegorY
Equity securities
Debt securities
Other
Total
PLAn ASSeTS
JAnuArY 30,
2010
63%
36%
1%
100%
JANUARY 31,
2009
58%
41%
1%
100%
The investment strategy of the trust is to ensure over the long-term an asset pool, that when combined with company
contributions, will support benefit obligations to participants, retirees and beneficiaries. Investment management
responsibilities of plan assets are delegated to outside investment advisers and overseen by an Investment Committee
comprised of members of the Company’s senior management that is appointed by the Board of Directors. The
Company has an investment policy that provides direction on the implementation of this strategy.
The investment policy establishes a target allocation for each asset class and investment manager. The actual asset
allocation versus the established target is reviewed at least quarterly and is maintained within a +/- 5% range of the
target asset allocation. Target allocations are 50% domestic equity, 13% international equity, 35% fixed income and
2% cash investments.
All investments are made solely in the interest of the participants and beneficiaries for the exclusive purposes of
providing benefits to such participants and their beneficiaries and defraying the expenses related to administering the
Trust as determined by the Investment Committee. All assets shall be properly diversified to reduce the potential of a
single security or single sector of securities having a disproportionate impact on the portfolio.
The Committee utilizes an outside investment consultant and a team of investment managers to implement its
various investment strategies. Performance of the managers is reviewed quarterly and the investment objectives are
consistently evaluated.
At January 30, 2010 and January 31, 2009, there were no Company related assets in the plan.
Generally, quoted market prices are used to value pension plan assets. Equities, some fixed income securities, publicly
traded investment funds and U.S. government obligations are valued at the closing price reported on the active market
on which the individual security is traded.
72
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
Genesco inc. AND SUBSIDIARIES
note 12: defined Benefit pension plans and other postretirement Benefit plans, continued
The following table presents the pension plan assets by level within the fair value hierarchy as of January 30, 2010.
In THouSAndS
Equity Securities:
Common Stocks
Europacific Growth Fund
Davis New York Venture Fund
Harbor Capital Appreciation Fund
Harbor Small Cap Growth Fund
Veracity Small Cap Value Fund
Debt Securities:
Pimco Long Duration
Total Return Fund
Pimco Total Return Fund
Other:
Cash Equivalents
Other (includes receivables and payables)
Total pension plan assets
C A S H F Lo W S
R E T U R N O F A S S E T S
level 1
level 2
level 3
ToTal
$ 11,008
11,377
10,851
10,646
6,378
6,299
24,083
8,135
611
(19)
$ 89,369
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$ 11,008
11,377
10,851
10,646
6,378
6,299
24,083
8,135
611
(19)
$ 89,369
There was no return of assets from the plan to the Company in 2009 and no plan assets are projected to be returned
to the Company in 2010.
C O N T R I B U T I O N S
There was no ERISA cash requirement for the plan in 2009 and none is projected to be required in 2010. However,
the Company’s current cash policy is to fund the cost of benefits accruing each year (the “normal cost”) plus an
amortization of the unfunded accrued liability. The Company made a $4.0 million contribution in February 2010.
E S T I M AT E D F U T U R E B E N E F I T PAY M E N T S
Expected benefit payments from the trust, including future service and pay, are as follows:
eSTIMATed FuTure PAYMenTS
2010
2011
2012
2013
2014
2015–2019
Pension
Benefits
($ in millions)
$ 8.5
8.6
8.4
8.4
8.4
40.2
Other
Benefits
($ in millions)
$ 0.3
0.3
0.3
0.2
0.2
1.1
73
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 12: defined Benefit pension plans and other postretirement Benefit plans, continued
s e c T i o n 4 0 1 ( k ) s a v i n G s p l a n
The Company has a Section 401(k) Savings Plan available to employees who have completed one full year of service
and are age 21 or older.
Concurrent with the January 1, 1996 amendment to the pension plan (discussed previously), the Company amended the
401(k) savings plan to make matching contributions equal to 50% of each employee’s contribution of up to 5% of salary.
Concurrent with freezing the defined benefit pension plan effective January 1, 2005, the Company amended the 401(k)
savings plan to change the formula for matching contributions. Beginning January 1, 2005, the Company will match 100%
of each employee’s contribution of up to 3% of salary and 50% of the next 2% of salary. In addition, for those employees
hired before December 31, 2004, who were eligible for the Company’s cash balance retirement plan before it was frozen,
the Company will make an additional contribution of 2 1/2 % of salary to each employee’s account. Participants are vested
immediately in the matching contribution of their accounts. The contribution expense to the Company for the matching
program was approximately $3.2 million for Fiscal 2010, $3.1 million for Fiscal 2009 and $3.0 million for Fiscal 2008.
note 13: earnings per share
IN THOUSANDS,
InCoMe
SHAreS
Per-SHAre
INCOME
SHARES
PER-SHARE
INCOME
SHARES
PER-SHARE
ExCEPT PER SHARE AMOUNTS
(nuMerATor) (denoMInATor) AMounT
(NUMERATOR) (DENOMINATOR) AMOUNT
(NUMERATOR) (DENOMINATOR) AMOUNT
For THe YeAr ended
JAnuArY 30, 2010
FOR THE YEAR ENDED
JANUARY 31, 2009
FOR THE YEAR ENDED
FEBRUARY 2, 2008
Earnings from
continuing operations
$29,086
$156,219
Less: Preferred
stock dividends
(198)
(198)
$6,774
(217)
BASIC ePS
Income available to
common shareholders
28,888
21,471 $1.35
156,021
19,235 $8.11
6,557
22,441 $0.29
effecT of diluTive securiTies
Options
Convertible
preferred stock(1)
4 1/8% Convertible
Subordinated
Debentures(2)
Employees’
preferred stock(3)
dILuTed ePS
Income available to common
shareholders plus assumed
210
267
486
-0-
-0-
153
59
-0-
-0-
1,911
1,768
4,393
4,298
-0-
-0-
51
52
57
conversions
$30,799
23,500 $1.31 $160,567
23,911 $6.72
$6,557
22,984 $0.29
(1) The amount of the dividend on the convertible preferred stock per common share obtainable on conversion of the convertible preferred stock is higher than
basic earnings per share for Series 4 for Fiscal 2010 and Fiscal 2008, Series 3 for Fiscal 2010 and Fiscal 2008 and Series 1 for Fiscal 2010 and Fiscal 2008.
Therefore, conversion of Series 4, Series 3 and Series 1 convertible preferred stock is not reflected in diluted earnings per share for Fiscal 2010 and Fiscal 2008,
because it would have been antidilutive. The amount of the dividend on Series 4, Series 3 and Series 1 convertible preferred stock per common share obtainable
on conversion of the convertible preferred stock was less than basic earnings per share for Fiscal 2009. Therefore, conversion of Series 4, Series 3 and Series 1
preferred shares were included in diluted earnings per share for Fiscal 2009. The shares convertible to common stock for Series 1, 3 and 4 preferred stock would
have been 27,913 and 25,949 and 5,423, respectively, as of January 30, 2010.
(2) The amount of the interest on the convertible subordinated debentures for Fiscal 2008 per common share obtainable on conversion is higher than basic
earnings per share, therefore the convertible debentures are not reflected in diluted earnings per share for Fiscal 2008 because it was antidilutive.
(3) The Company’s Employees’ Subordinated Convertible Preferred Stock is convertible one for one to the Company’s common stock. Because there are no
dividends paid on this stock, these shares are assumed to be converted.
74
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 13: earnings per share, continued
Options to purchase 12,000 shares of common stock at $32.65 per share, 12,000 shares of common stock at $23.97
per share, 60,752 shares of common stock at $23.54 per share, 325,982 shares of common stock at $24.90 per share,
71,428 shares of common stock at $36.40 per share, 1,945 shares of common stock at $40.05 per share, 103,474
shares of common stock at $38.14 per share, 951 shares of common stock at $37.41 per share and 2,351 shares of
common stock at $42.82 per share were outstanding at the end of Fiscal 2010 but were not included in the computation
of diluted earnings per share because the options’ exercise prices were greater than the average market price of the
common shares.
Options to purchase 16,000 shares of common stock at $32.65 per share, 334,250 shares of common stock at $24.90
per share, 74,823 shares of common stock at $36.40 per share, 1,945 shares of common stock at $40.05 per share,
107,490 shares of common stock at $38.14 per share, 951 shares of common stock at $37.41 per share and 2,351
shares of common stock at $42.82 per share were outstanding at the end of Fiscal 2009 but were not included in the
computation of diluted earnings per share because the options’ exercise prices were greater than the average market
price of the common shares.
Options to purchase 74,918 shares of common stock at $36.40 per share, 2,378 shares of common stock at $40.05
per share, 108,509 shares of common stock at $38.14 per share, 951 shares of common stock at $37.41 per share and
2,351 shares of common stock at $42.82 per share were outstanding at the end of Fiscal 2008 but were not included
in the computation of diluted earnings per share because the options’ exercise prices were greater than the average
market price of the common shares.
The weighted shares outstanding reflects the effect of stock buy back programs. In a series of authorizations from
Fiscal 1999-2003, the Company’s board of directors authorized the repurchase of up to 7.5 million shares. In June
2006, the board authorized an additional $20.0 million in stock repurchases. In August 2006, the board authorized
an additional $30.0 million in stock repurchases. The Company did not repurchase any shares during Fiscal 2008.
In March 2008, the board authorized up to $100.0 million in stock repurchases primarily funded with the after-tax
cash proceeds of the settlement of merger-related litigation with The Finish Line and UBS (see Notes 3 and 15). The
Company repurchased 4.0 million shares at a cost of $90.9 million during Fiscal 2009. The Company repurchased
85,000 shares at a cost of $2.0 million during Fiscal 2010, which was not paid at the end of Fiscal 2010 but included
in other accrued liabilities on the Consolidated Balance Sheets. In total, the Company has repurchased 12.2 million
shares at a cost of $196.3 million from all authorizations as of January 30, 2010. In February 2010, the board increased
the total repurchase authorization to $35.0 million.
note 14: shared-Based compensation plans
The Company’s stock-based compensation plans, as of January 30, 2010, are described below. The Company
recognizes compensation expense for share-based payments based on the fair value of the awards as required by the
Compensation – Stock Compensation Topic of the Codification.
s T o c k i n c e n T i v e p l a n s
The Company has two fixed stock incentive plans. Under the 2009 Equity Incentive Plan (the “2009 Plan”), effective
as of June 24, 2009, the Company may grant options, restricted shares, performance awards and other stock-based
awards to its employees, consultants and directors for up to 1.2 million shares of common stock. Under the 2005
Equity Incentive Plan (the “2005 Plan”), effective as of June 23, 2005, the Company may grant options, restricted
shares and other stock-based awards to its employees and consultants as well as directors for up to 1.0 million shares
of common stock. There will be no future awards under the 2005 Equity Incentive Plan. Under both plans, the exercise
price of each option equals the market price of the Company’s stock on the date of grant and an option’s maximum
term is 10 years. Options granted under both plans vest 25% per year.
75
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 14: shared-Based compensation plans, continued
For Fiscal 2010, 2009 and 2008, the Company recognized share-based compensation cost of $0.4 million, $1.7
million and $3.2 million, respectively, for its fixed stock incentive plans included in selling and administrative
expenses in the accompanying Consolidated Statements of Operations. The Company did not capitalize any
share-based compensation cost.
The Compensation-Stock Compensation Topic of the Codification requires that the cash flows resulting from tax
benefits for tax deductions in excess of the compensation cost recognized for those options (excess tax benefit)
be classified as financing cash flows. Accordingly, the Company classified excess tax benefits of $0.2 million and
$0.7 million as financing cash inflows rather than as operating cash inflows on its Consolidated Statement of Cash
Flows for Fiscal 2009 and 2008, respectively.
The Company did not grant any shares of fixed stock options in Fiscal 2010 or 2009. The Company granted 2,351
shares of fixed stock options in Fiscal 2008. For Fiscal 2008, the Company estimated the fair value of each option
award on the date of grant using a Black-Scholes option pricing model. The Company based expected volatility
on historical term structures. The Company based the risk free rate on an interest rate for a bond with a maturity
commensurate with the expected term estimate. The Company estimated the expected term of stock options using
historical exercise and employee termination experience. The Company does not currently pay a dividend. The following
table shows the weighted average assumptions used to develop the fair value estimates for Fiscal 2008:
Volatility
Risk Free Rate
Expected Term (years)
Dividend Yield
F I S C A L Y e A r
2008
35.3%
4.7%
4.7
0.0%
A summary of fixed stock option activity and changes for Fiscal 2010, 2009 and 2008 is presented below:
WeIgHTed-AverAge
reMAInIng
SHAreS
1,160,786
exerCISe PrICe
$ 23.25
ConTrACTuAL TerM
vALue (In
THouSAndS)(1)
WeIgHTed-AverAge
AggregATe InTrInSIC
Outstanding, February 3, 2007
Granted
Exercised
Forfeited
2,351
(32,751)
(712)
Outstanding, February 2, 2008
1,129,674
Granted
Exercised
Forfeited
Outstanding, January 31, 2009
granted
exercised
Forfeited
outstanding, january 30, 2010
exercisable, january 30, 2010
-0-
(82,868)
(3,047)
1,043,759
-0-
(28,500)
(19,679)
995,580
968,223
42.82
17.83
38.14
$ 23.44
-
17.35
31.84
$ 23.90
-
14.04
31.16
$ 24.04
$ 23.64
4.27
4.20
$ 2,597
$ 2,597
(1) Based upon the difference between the closing market price of the Company’s common stock on the last trading day of the year and the grant price
of in-the-money options.
The total intrinsic value, which represents the difference between the underlying stock’s market price and the option’s exercise
price, of options exercised during Fiscal 2010, 2009 and 2008 was $0.4 million, $1.4 million and $0.9 million, respectively.
76
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 14: shared-Based compensation plans, continued
A summary of the status of the Company’s nonvested shares of its fixed stock incentive plans as of January 30, 2010,
Genesco inc. AND SUBSIDIARIES
is presented below:
n o n v e S T e d F I x e d S T o C k o P T I o n S
Nonvested at January 31, 2009
Granted
Vested
Forfeited
nonvested at January 30, 2010
S H A r e S
75,384
-0-
(28,348)
(19,679)
27,357
W e I g H T e d - A v e r A g e
g r A n T- d AT e
FA I r v A L u e
$ 16.29
-
15.50
17.25
$ 16.41
As of January 31, 2010 there were $0.2 million of total unrecognized compensation costs related to nonvested share-
based compensation arrangements granted under the stock incentive plans discussed above. That cost is expected
to be recognized over a weighted average period of 0.7 years.
Cash received from option exercises under all share-based payment arrangements for Fiscal 2010, 2009 and 2008 was
$0.4 million, $1.4 million and $0.6 million, respectively.
r e s T r i c T e d s T o c k i n c e n T i v e p l a n s
D I R E C T O R R E S T R I C T E D S T O C K
The 2009 and 2005 Plans permit the board of directors to grant restricted stock to non-employee directors on the date
of the annual meeting of shareholders at which an outside director is first elected (“New Director Grants”). The outside
director restricted stock so granted is to vest with respect to one-third of the shares each year as long as the director
is still serving as a director. Once the shares have vested, the director is restricted from selling, transferring, pledging
or assigning the shares for an additional two years. There were no shares issued in New Director Grants in Fiscal 2010,
2009 and 2008.
In addition, the 2009 and 2005 Plans permit an outside director to elect irrevocably to receive all or a specified portion of
his annual retainers for board membership and any committee chairmanship for the following fiscal year in a number of
shares of restricted stock (the “Retainer Stock”). Shares of the Retainer Stock are granted as of the first business day of
the fiscal year as to which the election is effective, subject to forfeiture to the extent not earned upon the outside director’s
ceasing to serve as a director or committee chairman during such fiscal year. Once the shares are earned, the director is
restricted from selling, transferring, pledging or assigning the shares for an additional three years. There were no retainer
shares issued in Fiscal 2010 or 2009. In Fiscal 2008, the Company issued 6,761 shares of Retainer Stock.
Also pursuant to the 2005 Plan, annually on the date of the annual meeting of shareholders, beginning in Fiscal 2007,
each outside director received restricted stock valued at $60,000 based on the average of stock prices for the first
five days in the month of the annual meeting of shareholders. The outside director restricted stock vests with respect
to one-third of the shares each year as long as the director is still serving as a director. Once the shares vest, the
director is restricted from selling, transferring, pledging or assigning the shares for an additional two years. Under the
2009 Plan, director stock awards were made during Fiscal 2010 on substantially the same terms as grants under the
2005 Plan. For Fiscal 2010 and 2009, the Company issued 21,204 shares and 18,792 shares, respectively, of director
restricted stock. There were no shares of director restricted stock issued in Fiscal 2008.
For Fiscal 2010, 2009 and 2008, the Company recognized $0.4 million, $0.3 million and $0.6 million, respectively, of
director restricted stock related share-based compensation in selling and administrative expenses in the accompanying
Consolidated Statements of Operations.
77
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 14: shared-Based compensation plans, continued
E M P LO Y E E R E S T R I C T E D S T O C K
Under the 2009 Plan, the Company issued 383,745 shares of employee restricted stock in Fiscal 2010. Under the
2005 Plan, the Company issued 397,273 shares and 3,547 shares of employee restricted stock in Fiscal 2009 and
2008, respectively. Of the 383,745 shares issued in Fiscal 2010, 359,096 shares and the shares issued in Fiscal 2008
vest 25% per year over four years, provided that on such date the grantee has remained continuously employed by the
Company since the date of grant. The additional 24,649 shares issued in Fiscal 2010 and the shares issued in Fiscal
2009 vest one-third per year over three years. The fair value of employee restricted stock is charged against income as
compensation cost over the vesting period. Compensation cost recognized in selling and administrative expenses in the
accompanying Consolidated Statements of Operations for these shares was $6.2 million, $6.0 million and $4.0 million for
Fiscal 2010, 2009 and 2008, respectively. A summary of the status of the Company’s nonvested shares of its employee
restricted stock as of January 30, 2010 is presented below:
n o n v e S T e d r e S T r I C T e d S H A r e S
Nonvested at February 3, 2007
Granted
Vested
Withheld for federal taxes
Forfeited
Nonvested at February 2, 2008
Granted
Vested
Withheld for federal taxes
Forfeited
Nonvested at January 31, 2009
granted
vested
Withheld for federal taxes
Forfeited
nonvested at January 30, 2010
S H A r e S
361,797
3,547
(51,720)
(19,397)
(976)
293,251
397,273
(124,869)
(52,969)
(4,353)
508,333
383,745
(138,714)
(65,299)
(11,951)
676,114
W e I g H T e d - A v e r A g e
g r A n T- d AT e
FA I r v A L u e
37.23
$
42.82
37.46
37.47
38.14
37.23
20.79
36.84
36.86
27.42
24.60
19.25
26.70
26.32
25.97
$ 20.94
As of January 30, 2010 there were $10.2 million of total unrecognized compensation costs related to nonvested share-
based compensation arrangements for restricted stock discussed above. That cost is expected to be recognized over
a weighted average period of 2.4 years.
e m p lo Y e e s T o c k p u r c h a s e p l a n
Under the Employee Stock Purchase Plan, the Company is authorized to issue up to 1.0 million shares of common
stock to qualifying full-time employees whose total annual base salary is less than $90,000, effective October 1, 2002.
Prior to October 1, 2002, the total annual base salary was limited to $100,000. Under the terms of the Plan, employees
could choose each year to have up to 15% of their annual base earnings or $8,500, whichever is lower, withheld to
purchase the Company’s common stock. The purchase price of the stock was 85% of the closing market price of the
stock on either the exercise date or the grant date, whichever was less. The Company’s board of directors amended the
Company’s Employee Stock Purchase Plan effective October 1, 2005 to provide that participants may acquire shares
under the Plan at a 5% discount from fair market value on the last day of the Plan year. Employees can choose each
year to have up to 15% of their annual base earnings or $9,500, whichever is lower, withheld to purchase the Company’s
common stock. Under the Compensation – Stock Compensation Topic of the Codification, shares issued under the Plan
as amended are non-compensatory. No participant contributions were accepted by the Company under the Plan after
September 28, 2007 as a result of the Finish Line merger agreement, which was terminated in March 2008. A new “short”
plan year began April 1, 2008 and a normal plan year resumed on October 1, 2008. Under the Plan, the Company sold
4,350 shares, 1,711 shares and 4,813 shares to employees in Fiscal 2010, 2009 and 2008, respectively.
78
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 14: shared-Based compensation plans, continued
s T o c k p u r c h a s e p l a n s
Stock purchase accounts arising out of sales to employees prior to 1972 under certain employee stock purchase
plans amounted to $123,000 and $132,000 at January 30, 2010 and January 31, 2009, respectively, and were secured
at January 30, 2010, by 6,670 employees’ preferred shares. Payments on stock purchase accounts under the stock
purchase plans have been indefinitely deferred. No further sales under these plans are contemplated.
note 15: legal proceedings
e n v i r o n m e n Ta l m aT T e r s
N E W Y O R K S TAT E E N V I R O N M E N TA L M AT T E R S
In August 1997, the New York State Department of Environmental Conservation (“NYSDEC”) and the Company entered
into a consent order whereby the Company assumed responsibility for conducting a remedial investigation and
feasibility study (“RIFS”) and implementing an interim remedial measure (“IRM”) with regard to the site of a knitting
mill operated by a former subsidiary of the Company from 1965 to 1969. The Company undertook the IRM and RIFS
voluntarily, without admitting liability or accepting responsibility for any future remediation of the site. The Company
has completed the IRM and the RIFS. In the course of preparing the RIFS, the Company identified remedial alternatives
with estimated undiscounted costs ranging from $-0- to $24.0 million, excluding amounts previously expended or
provided for by the Company. The United States Environmental Protection Agency (“EPA”), which has assumed primary
regulatory responsibility for the site from NYSDEC, issued a Record of Decision in September 2007. The Record of
Decision requires a remedy of a combination of groundwater extraction and treatment and in-site chemical oxidation
at an estimated present worth cost of approximately $10.7 million.
In July 2009, the Company agreed to a Consent Order with the EPA requiring the Company to perform certain
remediation actions, operations, maintenance and monitoring at the site. In September 2009, a Consent Judgment
embodying the Consent Order was filed in the U.S. District Court for the Eastern District of New York.
The Village of Garden City, New York, has asserted that the Company is liable for the costs associated with enhanced
treatment required by the impact of the groundwater plume from the site on two public water supply wells, including
historical costs ranging from approximately $1.8 million to in excess of $2.5 million, and future operation and maintenance
costs which the Village estimates at $126,400 annually while the enhanced treatment continues. On December 14, 2007,
the Village filed a complaint against the Company and the owner of the property under the Resource Conservation and
Recovery Act (“RCRA”), the Safe Drinking Water Act, and the Comprehensive Environmental Response, Compensation
and Liability Act (“CERCLA”) as well as a number of state law theories in the U.S. District Court for the Eastern District
of New York, seeking an injunction requiring the defendants to remediate contamination from the site and to establish
their liability for future costs that may be incurred in connection with it, which the complaint alleges could exceed $41
million over a 70-year period. The Company has not verified the estimates of either historic or future costs asserted
by the Village, but believes that an estimate of future costs based on a 70-year remediation period is unreasonable
given the expected remedial period reflected in the EPA’s Record of Decision. On May 23, 2008, the Company filed
a motion to dismiss the Village’s complaint on grounds including applicable statutes of limitation and preemption of
certain claims by the NYSDEC’s and the EPA’s diligent prosecution of remediation. On January 27, 2009, the Court
granted the motion to dismiss all counts of the plaintiff’s complaint except for the CERCLA claim and a state law claim
for indemnity for costs incurred after November 27, 2000. On September 23, 2009, on a motion for reconsideration by
the Village, the Court reinstated the claims for injunctive relief under RCRA and for equitable relief under certain of the
state law theories.
In December 2005, the EPA notified the Company that it considers the Company a potentially responsible party (“PRP”)
with respect to contamination at two Superfund sites in upstate New York. The sites were used as landfills for process
wastes generated by a glue manufacturer, which acquired tannery wastes from several tanners, allegedly including
the Company’s Whitehall tannery, for use as raw materials in the gluemaking process. The Company has no records
indicating that it ever provided raw materials to the gluemaking operation and has not been able to establish whether
the EPA’s substantive allegations are accurate. The Company, together with other tannery PRPs, has entered into cost
79
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 15: legal proceedings, continued
sharing agreements and Consent Decrees with the EPA with respect to both sites. Based upon the current estimates
of the cost of remediation, the Company’s share is expected to be less than $250,000 in total for the two sites. While
there is no assurance that the Company’s share of the actual cost of remediation will not exceed the estimate, the
Company does not presently expect that its aggregate exposure with respect to these two landfill sites will have a
material adverse effect on its financial condition or results of operations.
W H I T E H A L L E N V I R O N M E N TA L M AT T E R S
The Company has performed sampling and analysis of soil, sediments, surface water, groundwater and waste
management areas at the Company’s former Volunteer Leather Company facility in Whitehall, Michigan.
The Company has submitted to the Michigan Department of Environmental Quality (“MDEQ”) and provided for certain
costs associated with a remedial action plan (the “Plan”) designed to bring the property into compliance with regulatory
standards for non-industrial uses and has subsequently engaged in negotiations regarding the scope of the Plan. The
Company estimates that the costs of resolving environmental contingencies related to the Whitehall property range
from $3.9 million to $4.4 million, and considers the cost of implementing the Plan, as it is modified in the course of
negotiations with the MDEQ, to be the most likely cost within that range. Until the Plan is finally approved by the MDEQ,
management cannot provide assurances that no further remediation will be required or that its estimate of the range of
possible costs or of the most likely cost of remediation will prove accurate.
A C C R U A L F O R E N V I R O N M E N TA L C O N T I N G E N C I E S
Related to all outstanding environmental contingencies, the Company had accrued $15.9 million as of January 30, 2010,
$16.0 million as of January 31, 2009 and $7.8 million as of February 2, 2008. All such provisions reflect the Company’s
estimates of the most likely cost (undiscounted, including both current and noncurrent portions) of resolving the
contingencies, based on facts and circumstances as of the time they were made. There is no assurance that relevant
facts and circumstances will not change, necessitating future changes to the provisions. Such contingent liabilities are
included in the liability arising from provision for discontinued operations on the accompanying Consolidated Balance
Sheets. The Company has made pretax accruals for certain of these contingencies, including approximately $0.8
million reflected in Fiscal 2010, $9.4 million in Fiscal 2009 and $2.9 million in Fiscal 2008. These charges are included
in provision for discontinued operations, net in the Consolidated Statements of Operations.
m e r G e r - r e l aT e d l i T i G aT i o n
G E n E S C o I n C . V. T H E F I n I S H L I n E , E T A L .
U B S S E C U R I T I E S L L C A n D U B S Lo A n F I n A n C E L L C V. G E n E S C o I n C . , ET AL.
On June 18, 2007, the Company announced that the boards of directors of Genesco and The Finish Line had
unanimously approved a definitive merger agreement under which The Finish Line would acquire all of the outstanding
common shares of Genesco at $54.50 per share in cash. On September 21, 2007, the Company filed suit against The
Finish Line in Chancery Court in Nashville, Tennessee seeking a court order requiring The Finish Line to consummate
the merger with the Company (the “Tennessee Action”). UBS Securities LLC and UBS Loan Finance LLC (collectively,
“UBS”) subsequently intervened as a defendant in the Tennessee Action, filed an answer to the amended complaint and
a counterclaim asserting fraud against the Company.
On November 15, 2007, UBS filed a separate lawsuit in the United States District Court for the Southern District of New
York (the “New York Action”), naming the Company and The Finish Line as defendants. In the New York Action, UBS
sought a declaration that its commitment to provide The Finish Line with financing for the merger transaction was void
and/or could be terminated by UBS because The Finish Line would not be able to provide, prior to the expiration of the
financing commitment on April 30, 2008, a valid solvency certificate attesting to the solvency of the combined entities
resulting from the merger, which certificate was a condition precedent to the closing of the financing. The Company
was named in the New York Action as an interested party.
Trial of the Tennessee Action began on December 10, 2007 and concluded on December 18, 2007. On December
27, 2007, the Chancery Court ordered The Finish Line to specifically perform the terms of the Merger Agreement. In
its order, the Court rejected UBS’s and The Finish Line’s claims of fraud and misrepresentation and declared that all
80
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
Genesco inc. AND SUBSIDIARIES
note 15: legal proceedings, continued
conditions to the Merger Agreement had been met. The Court also declared that The Finish Line had breached the
Merger Agreement by not closing the merger. The Court ordered The Finish Line to close the merger pursuant to
section 1.2 of the Merger Agreement, to use its reasonable best efforts to take all actions to consummate the merger
as required by section 6.4(d) of the Merger Agreement, and to use its reasonable best efforts to obtain financing as
per section 6.8(a) of the Merger Agreement. The Court excluded from its order any ruling on the issue of the solvency
of the combined company, finding that the issue of solvency was reserved for determination by the New York Court in
the New York Action filed by UBS.
On March 3, 2008, the Company, The Finish Line, and UBS entered into a definitive agreement for the termination
of the merger agreement with The Finish Line and the settlement of all related litigation among The Finish Line and
the Company and UBS, including the Tennessee Action and the New York Action. In the settlement agreement, the
parties agreed that: (1) the merger agreement between the Company and The Finish Line would be terminated; (2) the
financing commitment from UBS to The Finish Line would be terminated; (3) UBS and The Finish Line would pay to the
Company an aggregate of $175 million in cash; (4) The Finish Line would transfer to the Company a number of Class
A shares of The Finish Line common stock equal to 12.0% of the total post-issuance outstanding shares of The Finish
Line common stock which the Company would use its best efforts to distribute to its common shareholders as soon
as practicable after the shares’ registration and listing on NASDAQ; (5) the Company and The Finish Line would be
subject to a mutual standstill agreement; and (6) the parties would execute customary mutual releases. Stipulations
of Dismissal were filed by all parties to both the New York Action and the Tennessee Action, and both Actions were
dismissed. The Company distributed the shares of The Finish Line common stock received in the settlement to the
Company’s shareholders during the second quarter of Fiscal 2009.
c a l i f o r n i a m aT T e r s
On June 16, 2008, there was filed in the Superior Court of the State of California, County of Shasta, a putative class
action styled Jacobs v. Genesco Inc. et al., alleging violations of the California Labor Code involving payment of
wages, failure to provide mandatory meal and rest breaks, and unfair competition, and seeking back pay, penalties
and declaratory and injunctive relief. The Company removed the case to the Federal District Court for the Eastern
District of California. On September 3, 2008, the court dismissed certain of the plaintiff’s claims, including claims for
conversion and punitive damages. On May 5, 2009, the Company and the plaintiff’s counsel reached an agreement
in principle to settle the lawsuit on a claims made basis. On January 21, 2010, the court granted preliminary approval
of the settlement. The minimum payment by the Company pursuant to the agreement, which remains subject to final
court approval, is $398,000; the maximum is $703,000.
paT e n T a c T i o n
The Company is named as a defendant in Paul Ware and Financial Systems Innovation, L.L.C. v. Abercrombie & Fitch
Stores, Inc., et al., filed on June 19, 2007, in the United States District Court for the Northern District of Georgia, against
more than 100 retailers. The suit alleges that the defendants have infringed U.S. Patent No. 4,707,592 by using a feature
of their retail point of sale registers to generate transaction numbers for credit card purchases. The complaint seeks
treble damages in an unspecified amount and attorneys’ fees. The Company has filed an answer denying the substantive
allegations in the complaint and asserting certain affirmative defenses. On December 14, 2007, the Company filed a
third-party complaint against Datavantage Corporation and MICROS Systems, Inc., its vendor for the technology at issue
in the case, seeking indemnification and defense against the infringement allegations in the complaint. On December
27, 2007, the court stayed proceedings in the litigation pending the outcome of a reexamination of the patent by the U.
S. Patent and Trademark Office. On September 15, 2008, the patent examiner issued a first Office Action rejecting all of
the claims in the patent as being unpatentable over the prior art. On January 21, 2009, the examiner issued a final office
action again rejecting all of the claims in the patent. In April 2009, the examiner issued a Notice of Intent to Issue an Ex
Parte Reexamination Certificate for the patent. The litigation is in discovery.
81
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 15: legal proceedings, continued
o T h e r m aT T e r s
In addition to the matters specifically described in this footnote, the Company is a party to other legal and regulatory
proceedings and claims arising in the ordinary course of its business. While management does not believe that the
Company’s liability with respect to any of these other matters is likely to have a material effect on its financial position
or results of operations, legal proceedings are subject to inherent uncertainties and unfavorable rulings could have a
material adverse impact on our business and results of operations.
note 16: Business segment information
The Company operates five reportable business segments (not including corporate): Journeys Group, comprised
of the Journeys, Journeys Kidz and Shi by Journeys retail footwear chains, catalog and e-commerce operations;
Underground Station Group, comprised of the Underground Station retail footwear chain and e-commerce operations
and the remaining Jarman retail footwear stores; Hat World Group, comprised of the Hat World, Lids, Hat Shack, Hat
Zone, Head Quarters, Cap Connection and Lids Locker Room retail headwear stores and e-commerce operations,
the Sports Fan-Attic retail licensed sports headwear, apparel and accessory stores acquired in November 2009 and
the Impact Sports and Great Plains Sports team dealer businesses acquired in November 2008 and September 2009,
respectively; Johnston & Murphy Group, comprised of Johnston & Murphy retail operations, catalog and e-commerce
operations and wholesale distribution; and Licensed Brands, comprised primarily of Dockers® Footwear sourced and
marketed under a license from Levi Strauss & Company.
The accounting policies of the segments are the same as those described in the summary of significant accounting policies.
The Company’s reportable segments are based on the way management organizes the segments in order to make
operating decisions and assess performance along types of products sold. Journeys Group, Underground Station
Group and Hat World Group sell primarily branded products from other companies while Johnston & Murphy Group
and Licensed Brands sell primarily the Company’s owned and licensed brands.
Corporate assets include cash, prepaid income taxes, deferred income taxes, deferred note expense and corporate
fixed assets. The Company charges allocated retail costs of distribution to each segment and unallocated retail costs
of distribution to the corporate segment. The Company does not allocate certain costs to each segment in order to
make decisions and assess performance. These costs include corporate overhead, stock compensation, interest
expense, interest income, restructuring charges and other including major litigation and the loss on early retirement of debt.
Fiscal 2010
In THouSAndS
Sales
Intercompany sales
underground
JoHnSTon
JourneYS
STATIon
HAT WorLd
& MurPHY
LICenSed CorPorATe
grouP
grouP
grouP
grouP
BrAndS
& oTHer ConSoLIdATed
$ 749,202 $ 99,458 $ 465,878 $ 166,081 $ 93,291 $
643 $ 1,574,553
-0-
-0-
(102)
(2)
(97)
-0-
(201)
net sales to external customers
$ 749,202 $ 99,458 $ 465,776 $ 166,079 $ 93,194 $
643 $ 1,574,352
Segment operating income (loss)
$ 44,285 $
(4,584) $
44,039 $
5,484 $ 12,372 $ (27,813) $ 73,783
Restructuring and other*
-0-
-0-
-0-
-0-
-0- (13,361)
(13,361)
earnings (loss) from operations
44,285
(4,584)
44,039
5,484
12,372 (41,174)
60,422
Loss on early retirement of debt
Interest expense
Interest income
earnings (loss) from continuing
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
(5,518)
-0-
(4,430)
-0-
14
(5,518)
(4,430)
14
operations before income taxes
$ 44,285 $
(4,584) $
44,039 $
5,484 $ 12,372 $ (51,108) $ 50,488
Total assets**
Depreciation
Capital expenditures
$ 246,000 $ 28,497 $ 333,634 $ 67,705 $ 27,293 $ 160,523 $ 863,652
23,839
14,664
2,669
158
14,303
13,959
3,891
3,633
174
2,157
64
1,347
47,033
33,825
*Restructuring and other includes a $13.3 million charge for asset impairments, of which $9.5 million is in the Journeys Group, $2.1 million in the
Hat World Group, $0.9 million in the Johnston & Murphy Group and $0.8 million in the Underground Station Group.
**Total assets for Hat World Group include $119.0 million goodwill.
82
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 16: Business segment information, continued
Fiscal 2009
IN THOUSANDS
Sales
Intercompany sales
UNDERGROUND
JOHNSTON
JOURNEYS
STATION
HAT WORLD
& MURPHY
LICENSED
CORPORATE
GROUP
GROUP
GROUP
GROUP
BRANDS
& OTHER CONSOLIDATED
$ 760,008 $ 110,902 $ 405,446 $ 177,963 $ 96,656 $
682 $ 1,551,657
-0-
-0-
-0-
-0-
(95)
-0-
(95)
net sales to external customers
$ 760,008 $ 110,902 $ 405,446 $ 177,963 $ 96,561 $
682 $ 1,551,562
Segment operating income (loss)
$ 49,050 $
(5,660) $ 36,670 $ 10,069 $ 11,925 $ (39,003) $
63,051
Gain from settlement of
merger-related litigation
Restructuring and other*
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
204,075
204,075
-0-
(7,500)
(7,500)
earnings (loss) from operations
49,050
(5,660)
36,670
10,069
11,925
157,572
259,626
Interest expense
Interest income
earnings (loss) before income taxes
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
(9,234)
(9,234)
322
322
from continuing operations
$ 49,050 $
(5,660) $ 36,670 $ 10,069 $ 11,925 $ 148,660 $ 250,714
Total assets**
Depreciation
Capital expenditures
$ 270,043 $ 33,790 $ 306,904 $ 82,246 $ 32,070 $ 91,010 $ 816,063
23,417
23,437
3,336
295
13,828
15,705
3,634
6,985
188
300
2,354
2,698
46,757
49,420
* Restructuring and other includes an $8.6 million charge for asset impairments, of which $3.8 million is in the Hat World Group, $3.4 million in the
Journeys Group, $1.0 million in the Underground Station Group and $0.4 million in the Johnston & Murphy Group.
**Total assets for Hat World Group include $111.7 million goodwill.
Fiscal 2008
IN THOUSANDS
Sales
Intercompany sales
UNDERGROUND
JOHNSTON
JOURNEYS
STATION
HAT WORLD
& MURPHY
LICENSED
CORPORATE
GROUP
GROUP
GROUP
GROUP
BRANDS
& OTHER
CONSOLIDATED
$ 713,366 $ 124,002 $ 378,913 $ 192,487 $ 93,064 $
645 $ 1,502,477
-0-
-0-
-0-
-0-
(358)
-0-
(358)
net sales to external customers
$ 713,366 $ 124,002 $ 378,913 $ 192,487 $ 92,706 $
645 $ 1,502,119
Segment operating income (loss)
$ 51,097 $
(7,710) $ 31,987 $ 19,807 $ 10,976 $ (54,634) $
51,523
Restructuring and other*
-0-
-0-
-0-
-0-
-0-
(9,702)
(9,702)
earnings (loss) from operations
51,097
(7,710)
31,987
19,807
10,976
(64,336)
41,821
Interest expense
Interest income
earnings (loss) from continuing
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
(12,045)
(12,045)
144
144
operations before income taxes
$ 51,097 $
(7,710) $ 31,987 $ 19,807 $ 10,976 $ (76,237) $
29,920
Total assets**
Depreciation
Capital expenditures
$ 278,959 $ 45,734 $ 299,820 $ 72,753 $ 26,055 $ 78,364 $ 801,685
21,222
42,124
4,017
1,701
13,277
27,121
3,421
6,607
153
1,115
3,024
1,994
45,114
80,662
* Restructuring and other includes an $8.7 million charge for asset impairments, of which $4.7 million is in the Underground Station Group, $2.1 million
in the Hat World Group, $1.7 million in the Journeys Group and $0.2 million in the Johnston & Murphy Group.
**Total assets for Hat World Group include $107.6 million goodwill.
83
Genesco inc. AND SUBSIDIARIES
n o T e s T o c o n s o l i d aT e d f i n a n c i a l s TaT e m e n T s
note 17: quarterly financial information (unaudited)
( I n T H o u S A n d S , e x C e P T
P e r S H A r e A M o u n T S )
Net sales
Gross margin
Earnings (loss) from
continuing operations
1 S T q u A r T e r
2 n d q u A r T e r
3 r d q u A r T e r
2 0 1 0
2 0 0 9
2 0 1 0
2 0 0 9
2 0 1 0
2 0 0 9
4 T H q u A r T e r
2 0 1 0
2 0 0 9
F I S C A L Y e A r
2 0 1 0
2 0 0 9
$370,366 $356,935 $334,658 $353,138 $390,302 $389,767 $479,026 $451,722 $1,574,352 $1,551,562
189,222
181,395 169,945 181,324 200,166
197,914 236,537
219,349
795,870
779,982
before income taxes
(5,322)(1) 200,242(3)
(3,835)(5)
1,770(6) 17,403(8) 13,010(10) 42,242(11) 35,692(12)
50,488
250,714
Earnings (loss) from
continuing operations
(5,603) 129,440
(2,663)
(5,391)
11,523
8,991
25,829
23,179
29,086
156,219
Net earnings (loss)
(5,762)(2) 129,347(4)
(2,722)
(10,752)(7) 11,443(9)
8,966
25,854
23,195
28,813
150,756
Diluted earnings (loss)
per common share:
Continuing operations
Net earnings (loss)
(.30)
(.31)
5.14
5.14
(.12)
(.13)
(.29)
(.58)
.50
.50
.43
.43
1.08
1.08
1.05
1.05
1.31
1.30
6.72
6.49
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
Includes a net restructuring and other charge of $5.0 million (see Note 5) and a $5.1 million loss on early retirement of debt (see Note 8).
Includes a loss of $0.2 million, net of tax, from discontinued operations (see Note 5).
Includes a net restructuring and other charge of $2.2 million (see Note 5), a $7.3 million charge for merger-related expenses and a gain from the settlement of
merger-related litigation of $204.1 million (see Notes 3 and 15).
Includes a loss of $0.1 million, net of tax, from discontinued operations (see Note 5).
Includes a net restructuring and other charge of $3.3 million (see Note 5).
Includes a net restructuring and other charge of $3.3 million (see Note 5) and a $0.3 million charge for merger-related expenses (see Notes 3 and 15).
Includes a loss of $5.4 million, net of tax, from discontinued operations (see Note 5).
Includes a net restructuring and other charge of $2.6 million (see Note 5).
Includes a loss of $0.1 million, net of tax, from discontinued operations (see Note 5).
Includes a net restructuring and other charge of $2.3 million (see Note 5) and a $0.2 million charge for merger-related expenses (see Notes 3 and 15).
Includes a net restructuring and other charge of $2.5 million (see Note 5) and a $0.4 million loss on early retirement of debt (see Note 8).
Includes a net restructuring and other credit of $0.3 million (see Note 5) and a $0.2 million charge for merger-related expenses (see Notes 3 and 15).
84
c o r p o r aT e i n f o r m aT i o n
Genesco inc. AND SUBSIDIARIES
a n n u a l m e e T i n G o f s h a r e h o l d e r s
o T h e r i n f o r m aT i o n
The annual meeting of shareholders will be held
Certifications by the Chief Executive Officer and the Chief
Wednesday, June 23, 2010, at 10:00 a.m. CST, at the
Financial Officer of the Company pursuant to Section
corporate headquarters in Genesco Park, Nashville,
302 of the Sarbanes-Oxley Act of 2002 have been filed
Tennessee.
c o r p o r aT e h e a d q u a r T e r s
Genesco Park
1415 Murfreesboro Road – P.O. Box 731
Nashville, TN 37202-0731
i n d e p e n d e n T a u d i T o r s
Ernst & Young LLP
150 Fourth Avenue North
Suite 1400
Nashville, Tennessee 37219
T r a n s f e r a G e n T a n d r e G i s T r a r
Communications concerning stock
transfer, preferred
as exhibits of the Company’s 2010 Annual Report on
Form 10-K. The Chief Executive Officer has submitted to
the New York Stock Exchange (NYSE) the annual CEO
certification for fiscal 2010 regarding the Company’s
compliance with the NYSE’s corporate governance listing
standards.
f o r m 1 0 - k
Each year Genesco files with the Securities and Exchange
Commission a Form 10-K which contains more detailed
information. Any shareholder who would like to receive,
without charge, a single copy (without exhibits), or
who would like to receive extra copies of any Genesco
shareholder publication should send a request to:
stock dividends, consolidating accounts, change of
Claire S. McCall
address and lost or stolen stock certificates should be
Director, Corporate Relations
directed to the transfer agent. When corresponding with
Genesco Park, Suite 490 – P.O. Box 731
the transfer agent, shareholders should state the exact
Nashville, Tennessee 37202-0731
name(s) in which the stock is registered and certificate
(615) 367-8283
number, as well as old and new information about the
account.
Computershare Phone #: 877-224-0366
Address: Computershare Trust Company, N.A.
c o m m o n s T o c k l i s T i n G
New York Stock Exchange, Chicago Stock Exchange
Symbol: GCO
P. O. Box 43078
s h a r e h o l d e r i n f o r m aT i o n
Providence, Rhode Island 02940-3078
S h a r e h o l d e r i n f o r m a t i o n m a y b e a c c e s s e d a t
Private Couriers/Registered Mail:
www.genesco.com
Computershare Trust Company, N.A.
250 Royall Street
Canton, Massachusetts 02021
Questions & Inquiries via our Website:
http://www.computershare.com
Hearing Impaired #: TDD: 1-800-952-9245
i n v e s T o r r e l aT i o n s
Security analysts, portfolio managers or other investment
community representatives should contact:
Ja me s S. Gulmi, Senior Vice President – Fina nc e,
Chief Financial Officer and Treasurer
Genesco Park, Suite 490 – P.O. Box 731
Nashville, Tennessee 37202-0731
(615) 367-8325
85
Genesco inc. AND SUBSIDIARIES
B o a r d o f d i r e c T o r s
J a m e s s . B e a r d
Retired President, Caterpillar
Financial Services Corporation
Nashville, Tennessee
Member of the audit and finance committees
r o B e r t J . d e n n i s
Chairman, President and Chief Executive Officer
Genesco Inc.
m at t h e W C . d i a m o n d
L e o n a r d L . B e r r y
Chairman and Chief Executive Officer
Presidential Professor for Teaching
Alloy, Inc.
Excellence, Distinguished Professor of Marketing
New York, New York
and Professor of Humanities in Medicine
Chairman of the compensation committee and
Texas A&M University
College Station, Texas
Member of the compensation and nominating
and governance committees
W i L L i a m F. B L a u F u s s , J r .
member of the finance committee
m a r t y G . d i C k e n s
Retired President
AT&T – Tennessee
Nashville, Tennessee
Consultant, Certified Public Accountant
Member of the compensation and the nominating
Nashville, Tennessee
and governance committees
Chairman of the audit committee and member of
the finance committee
J a m e s W. B r a d F o r d
Dean, Owen School of Management
Vanderbilt University
Nashville, Tennessee
Chairman of the finance committee and member
of the nominating and governance committee
r o B e r t V. d a L e
Consultant
Nashville, Tennessee
Chairman of the nominating and governance committee
and member of the audit committee
c o r p o r aT e o f f i c e r s
B e n t. h a r r i s
Former Chairman
Genesco Inc.
k at h L e e n m a s o n
President and Chief Executive Officer
Tuesday Morning Corporation
Dallas, Texas
Member of the audit and compensation committees
h a L n . P e n n i n G t o n
Former Chairman
Genesco Inc.
r o B e r t J . d e n n i s
k e n n e t h J . ko C h e r
Chairman, President and Chief Executive Officer
Senior Vice President – Hat World/Lids
6 years with Genesco
J a m e s s . G u L m i
6 years with Genesco
r o G e r G . s i s s o n
Senior Vice President – Finance, Chief Financial Officer
Senior Vice President, Secretary and General Counsel
and Treasurer
38 years with Genesco
J o n at h a n d. C a P L a n
16 years with Genesco
m i m i e . V a u G h n
Senior Vice President of Strategy and
Senior Vice President – Genesco Branded
17 years with Genesco
J a m e s C . e s t e Pa
Shared Services
7 years with Genesco
Pa u L d. W i L L i a m s
Senior Vice President – Genesco Retail
Vice President and Chief Accounting Officer
25 years with Genesco
33 years with Genesco
86
G e n e s c o r e Ta i l s T o r e s A S O F 1 / 3 0 / 1 0
Genesco inc. AND SUBSIDIARIES
ALASkA
AnCHorAge LIDS (2), JOURNEYS (2)
FAIrBAnkS LIDS, JOURNEYS
ALABAMA
AuBurn HAT SHACK, JOURNEYS
BIrMIngHAM HAT SHACK, LIDS,
JOHNSTON & MURPHY SHOP, JOURNEYS
doTHAn HAT WORLD, JOURNEYS
FAIrFIeLd UNDERGROUND STATION
FLorenCe LIDS, JOURNEYS
FoLeY LIDS, JOHNSTON & MURPHY OUTLET,
JOURNEYS, JOURNEYS KIDZ
gAdSden HAT SHACK
HoMeWood JOURNEYS
Hoover JOURNEYS, SHI
HunTSvILLe HAT SHACK, LIDS, JOURNEYS (2),
UNDERGROUND STATION
MoBILe HAT SHACK, JOURNEYS, JOURNEYS KIDZ,
UNDERGROUND STATION
MonTgoMerY HAT SHACK
oxFord HAT SHACK, UNDERGROUND STATION
SPAnISH ForT JOURNEYS
TuSCALooSA HAT SHACK, JOURNEYS
ALBerTA
CALgArY LIDS
edMonTon CAP CONNECTION (2), LIDS,
HEAD QUARTERS (2)
MedICIne HAT LIDS
red deer LIDS
ArkAnSAS
FAYeTTevILLe HAT WORLD, JOURNEYS,
JOURNEYS KIDZ
ForT SMITH HAT WORLD, JOURNEYS
HoT SPrIngS JOURNEYS
JoneSBoro LIDS, JOURNEYS
LITTLe roCk LIDS
norTH LITTLe roCk JOURNEYS (2), HAT WORLD,
UNDERGROUND STATION
PIne BLuFF HAT WORLD, JOURNEYS
rogerS LIDS, JOURNEYS
ArIzonA
CHAndLer JOURNEYS, JOURNEYS KIDZ
FLAgSTAFF JOURNEYS, LIDS
gILBerT JOURNEYS
gLendALe LIDS, JOURNEYS
MeSA JOURNEYS (2), JOURNEYS KIDZ, LIDS (2)
PHoenIx HAT WORLD, LIDS (2),
JOHNSTON & MURPHY SHOP, JOURNEYS(4),
JOURNEYS KIDZ, UNDERGROUND STATION (2)
PreSCoTT JOURNEYS
SCoTTSdALe LIDS, JOHNSTON & MURPHY SHOP,
JOURNEYS, JOURNEYS KIDZ
SIerrA vISTA LIDS
TeMPe LIDS (2), JOURNEYS (2), JOURNEYS KIDZ
TuCSon LIDS, JOURNEYS (2), JOURNEYS KIDZ,
HAT WORLD, SHI, UNDERGROUND STATION
YuMA JOURNEYS
BrITISH CoLuMBIA
BurnABY LIDS (2)
keLoWnA HEAD QUARTERS
LAngLeY HEAD QUARTERS
nAnAIMo LIDS
SurreY LIDS
vAnCouver LIDS
vICTorIA HEAD QUARTERS
WHISTLer LIDS
CALIFornIA
ALPIne JOURNEYS
AnTIoCH LIDS, JOURNEYS
ArCAdIA LIDS, JOURNEYS
roSevILLe LIDS, JOHNSTON & MURPHY SHOP,
deLAWAre
JOURNEYS, JOURNEYS KIDZ, SHI
dover HAT WORLD, JOURNEYS
SACrAMenTo LIDS (3), JOURNEYS (2)
neWArk LIDS, JOHNSTON & MURPHY SHOP, JOURNEYS
SALInAS LIDS, JOURNEYS
BAkerSFIeLd LIDS, JOURNEYS,
SAn BernAdIno LIDS, JOURNEYS
JOURNEYS KIDZ, SHI
BreA LIDS, JOURNEYS
BurBAnk LIDS, JOURNEYS
SAn Bruno JOURNEYS
SAn dIego LIDS (4), JOHNSTON & MURPHY SHOP,
JOURNEYS (3)
CABAzon JOHNSTON & MURPHY OUTLET
SAn FrAnCISCo LIDS (3), JOHNSTON & MURPHY SHOP
reHoBoTH BeACH LIDS, JOURNEYS
WILMIngTon HAT WORLD, JOURNEYS
dISTrICT oF CoLuMBIA
WASHIngTon, d.C. LIDS,
JOHNSTON & MURPHY SHOP (4)
CAMArILLo LIDS, JOHNSTON & MURPHY OUTLET
SAn JoSe LIDS (2), JOURNEYS (2), JOURNEYS KIDZ
FLorIdA
CAnogA PArk LIDS, JOURNEYS
CAPIToLA LIDS, JOURNEYS
SAn LeAndro LIDS
SAn MATeo LIDS, JOURNEYS
CArLSBAd LIDS (2), JOHNSTON & MURPHY OUTLET,
SAn YSIdro JOURNEYS
JOURNEYS, JOURNEYS KIDZ,
SAnTA AnA LIDS, JOURNEYS
ALTAMonTe SPrIngS LIDS, JOURNEYS,
SPORTS FAN-ATTIC
AvenTurA LIDS, JOHNSTON & MURPHY SHOP,
JOURNEYS
SAnTA CLArA HAT WORLD, JOURNEYS,
BoCA rATon LIDS, JOHNSTON & MURPHY SHOP,
UNDERGROUND STATION
CerrIToS LIDS, JOURNEYS
CHICo LIDS, JOURNEYS
JOURNEYS KIDZ
SAnTA MonICA LIDS, JOURNEYS
CHuLA vISTA HAT WORLD, JOURNEYS (2), LIDS
SAnTA roSA LIDS, JOURNEYS, JOURNEYS KIDZ
CITruS HeIgHTS LIDS, JOURNEYS
CITY oF InduSTrY JOURNEYS
CoMMerCe LIDS, JOURNEYS
ConCord LIDS, JOURNEYS
SHerMAn oAkS JOURNEYS
SIMI vALLeY JOURNEYS
SToCkTon JOURNEYS, LIDS
TeMeCuLA JOURNEYS
CoSTA MeSA JOHNSTON & MURPHY SHOP,
THouSAnd oAkS LIDS, JOURNEYS
JOURNEYS
CuLver CITY LIDS
dALY CITY JOURNEYS
doWneY LIDS, JOURNEYS
eL CAJon LIDS, JOURNEYS
eL CenTro LIDS, JOURNEYS
eSCondIdo LIDS, JOURNEYS
eurekA HAT WORLD, JOURNEYS
TrACY HAT WORLD, JOURNEYS
TuLAre JOURNEYS
TuSTIn LIDS
vALenCIA JOURNEYS, LIDS
venTurA HAT WORLD, JOURNEYS
vICTorvILLe LIDS, JOURNEYS
vISALIA LIDS, JOURNEYS, JOURNEYS KIDZ
WeST CovInA LIDS, JOURNEYS
FAIrFIeLd JOURNEYS, LIDS, UNDERGROUND STATION
WeSTMInSTer LIDS, JOURNEYS
YuBA CITY LIDS, JOURNEYS
CoLorAdo
AurorA LIDS (2), JOURNEYS (2),
UNDERGROUND STATION
BrooMFIeLd LIDS, JOURNEYS
JOURNEYS
BoYnTon BeACH LIDS, JOURNEYS,
UNDERGROUND STATION
BrAdenTon LIDS, JOURNEYS
BrAndon LIDS, JOURNEYS, JOURNEYS KIDZ, SHI,
SPORTS FAN-ATTIC
CLeArWATer HAT SHACK, JOURNEYS,
JOURNEYS KIDZ, SHI, SPORTS FAN-ATTIC
CorAL SPrIngS HAT SHACK, JOURNEYS,
UNDERGROUND STATION
dAYTonA BeACH LIDS, JOURNEYS, JOURNEYS KIDZ
deSTIn LIDS, JOHNSTON & MURPHY OUTLET,
JOURNEYS (2)
eLLenTon JOURNEYS, JOHNSTON & MURPHY OUTLET
eSTero LIDS, JOURNEYS (2),
JOHNSTON & MURPHY OUTLET
FT. LAuderdALe JOURNEYS
FT. MYerS LIDS (3), JOURNEYS (2),
UNDERGROUND STATION
gAIneSvILLe HAT SHACK, JOURNEYS
HIALeAH HAT SHACK
JACkSonvILLe HAT SHACK, LIDS,
FoLSoM LIDS
FreSno LIDS, JOURNEYS
gILroY LIDS, JOHNSTON & MURPHY OUTLET
gLendALe LIDS
HAnFord LIDS, JOURNEYS
HAYWArd UNDERGROUND STATION
HoLLYWood LIDS
IrvIne LIDS
LAkeWood LIDS, JOURNEYS,
UNDERGROUND STATION
Long BeACH LIDS
LoS AngeLeS LIDS (3), JOHNSTON & MURPHY SHOP,
UNDERGROUND STATION
MILPITAS LIDS, JOURNEYS
ModeSTo LIDS, JOURNEYS, JOURNEYS KIDZ, SHI
MonTCLAIr LIDS, JOURNEYS
MonTeBeLLo LIDS, JOURNEYS
MonTereY LIDS
Moreno vALLeY LIDS, JOURNEYS
nATIonAL CITY LIDS, JOURNEYS, JOURNEYS KIDZ,
UNDERGROUND STATION
neWArk LIDS, JOURNEYS
norTHrIdge LIDS, JOURNEYS, JOURNEYS KIDZ,
UNDERGROUND STATION
CASTLe roCk LIDS, JOHNSTON & MURPHY OUTLET,
JOHNSTON & MURPHY SHOP, JOURNEYS (2),
JOURNEYS
CoLorAdo SPrIngS LIDS(2), JOURNEYS,
UNDERGROUND STATION
denver LIDS, JOHNSTON & MURPHY SHOP (2),
UNDERGROUND STATION (2)
JenSen BeACH JOURNEYS
kISSIMMee LIDS, JOURNEYS
LAke WALeS LIDS, JOURNEYS
JOURNEYS (3)
FT. CoLLInS JOURNEYS
grAnd JunCTIon LIDS, JOURNEYS
greeLeY JOURNEYS
LAkeWood LIDS, JOURNEYS
LITTLeTon HAT WORLD, JOURNEYS (2)
LoneTree JOHNSTON & MURPHY SHOP
LongMonT JOURNEYS
LoveLAnd LIDS, JOURNEYS
PueBLo LIDS, JOURNEYS
LAkeLAnd HAT WORLD, JOURNEYS, SPORTS FAN-ATTIC
MAdeIrA BeACH SPORTS FAN-ATTIC
MArY eSTHer HAT SHACK, JOURNEYS,
JOURNEYS KIDZ
MeLBourne HAT SHACK, JOURNEYS
MerrITT ISLAnd LIDS, JOURNEYS
MIAMI HAT SHACK, LIDS, JOURNEYS (2), JOURNEYS KIDZ,
SPORTS FAN-ATTIC, UNDERGROUND STATION (4), SHI
MIAMI BeACH JOURNEYS
nAPLeS LIDS, JOURNEYS, JOURNEYS KIDZ
SILverTHorne LIDS, JOURNEYS
oCALA LIDS
WeSTMInSTer LIDS, JOURNEYS, JOURNEYS KIDZ,
oCoee LIDS, JOURNEYS, UNDERGROUND STATION
UNDERGROUND STATION
orAnge PArk LIDS, JOURNEYS
orLAndo HAT SHACK, LIDS (5), JOHNSTON & MURPHY
SHOP, JOHNSTON & MURPHY OUTLET, JOURNEYS (6),
JOURNEYS KIDZ (2), UNDERGROUND STATION (2)
ovIedo JOURNEYS
onTArIo LIDS, JOURNEYS, JOURNEYS KIDZ
ConneCTICuT
orAnge LIDS
CLInTon JOHNSTON & MURPHY OUTLET
PALM deSerT LIDS, JOHNSTON & MURPHY SHOP,
dAnBurY LIDS, JOURNEYS, JOURNEYS KIDZ
JOURNEYS
PALMdALe LIDS, JOURNEYS
PAnorAMA CITY LIDS
PISMo BeACH JOURNEYS
PLeASAnTon LIDS, JOURNEYS
rAnCHo CuCAMongA JOURNEYS
reddIng JOURNEYS
redondo BeACH LIDS
rICHMond LIDS
rIverSIde LIDS, JOURNEYS
FArMIngTon LIDS, JOHNSTON & MURPHY SHOP
PALM BeACH gArdenS JOHNSTON & MURPHY SHOP,
MAnCHeSTer LIDS, JOURNEYS
MerIden LIDS, JOURNEYS
MILFord LIDS, JOURNEYS, UNDERGROUND STATION
STAMFord JOHNSTON & MURPHY SHOP, JOURNEYS
TruMBuLL LIDS, JOURNEYS
WATerBurY LIDS, JOURNEYS
WATerFord LIDS, JOURNEYS
WeSTBrook LIDS
WeSTPorT JOHNSTON & MURPHY SHOP
JOURNEYS
PAnAMA CITY LIDS, JOURNEYS
PAnAMA CITY BeACH LIDS, JOURNEYS
PeMBroke PIneS LIDS, JOURNEYS,
SPORTS FAN-ATTIC
PenSACoLA LIDS, JOURNEYS,
UNDERGROUND STATION
PLAnTATIon LIDS, JOURNEYS
PorT CHArLoTTe LIDS, JOURNEYS
PorT rICHeY HAT SHACK, JOURNEYS
87
Genesco inc. AND SUBSIDIARIES
G e n e s c o r e Ta i l s T o r e s A S O F 1 / 3 0 / 1 0
ST. AuguSTIne JOURNEYS
ST. PeTerSBurg JOURNEYS, LIDS,
ILLInoIS
kAnSAS
AurorA LIDS (2), JOHNSTON & MURPHY OUTLET,
LAWrenCe LIDS
SPORTS FAN-ATTIC, UNDERGROUND STATION
JOURNEYS (2), UNDERGROUND STATION
MAnHATTAn HAT WORLD, JOURNEYS
SAnFord HAT SHACK, JOURNEYS
SArASoTA LIDS, JOURNEYS, SPORTS FAN-ATTIC
SunrISe LIDS, JOURNEYS, UNDERGROUND STATION
TALLAHASSee HAT SHACK, HAT WORLD, LIDS,
BLooMIngdALe HAT WORLD, JOURNEYS
oLATHe JOURNEYS
BLooMIngTon HAT WORLD, JOURNEYS
overLAnd PArk LIDS, JOHNSTON & MURPHY SHOP,
BoLIngBrook JOURNEYS
JOURNEYS
CALuMeT CITY LIDS, UNDERGROUND STATION
SALInA JOURNEYS
JOURNEYS (2), SPORTS FAN-ATTIC,
CArBondALe JOURNEYS
ToPekA LIDS, JOURNEYS
UNDERGROUND STATION
CHAMPAIgn LIDS, JOURNEYS
WICHITA LIDS (2), JOURNEYS (2),
TAMPA HAT SHACK, LIDS (3), JOHNSTON &
CHICAgo LIDS (4), JOURNEYS,
UNDERGROUND STATION
HAnover LIDS, JARMAN SHOE STORE, JOURNEYS
HYATTSvILLe LIDS, UNDERGROUND STATION
oWIngS MILLS UNDERGROUND STATION
queenSToWn JOHNSTON & MURPHY OUTLET
SALISBurY HAT WORLD, JOURNEYS
ToWSon JOURNEYS
WALdorF HAT WORLD, UNDERGROUND STATION
WeSTMInSTer JOURNEYS
WHeATon HAT SHACK, LIDS, JOURNEYS,
UNDERGROUND STATION
MURPHY SHOP (2), JOURNEYS (4), JOURNEYS KIDZ,
JOHNSTON & MURPHY SHOP (2),
SPORTS FAN-ATTIC (3), UNDERGROUND STATION
UNDERGROUND STATION
vero BeACH JOURNEYS
CHICAgo rIdge LIDS, JOURNEYS,
WeLLIngTon JOHNSTON & MURPHY SHOP,
UNDERGROUND STATION
JOURNEYS, LIDS, SPORTS FAN-ATTIC
evergreen PArk LIDS, UNDERGROUND STATION
WeST PALM BeACH JOURNEYS
FAIrvIeW HeIgHTS LIDS, JOURNEYS, JOURNEYS KIDZ
kenTuCkY
ASHLAnd LIDS, JOURNEYS
MASSACHuSeTTS
AuBurn LIDS, JOURNEYS
BoWLIng green LIDS, JOURNEYS
BoSTon LIDS, JOHNSTON & MURPHY SHOP (2)
FLorenCe HAT WORLD, JOURNEYS, LIDS KIDS,
BrAInTree LIDS, JOURNEYS
JOURNEYS KIDZ
HeBron JOHNSTON & MURPHY SHOP
BroCkTon LIDS, UNDERGROUND STATION
BurLIngTon LIDS, JOHNSTON & MURPHY SHOP,
LexIngTon HAT WORLD, LIDS, JOURNEYS,
JOURNEYS
JOURNEYS KIDZ, SHI
CAMBrIdge LIDS, JOURNEYS
LouISvILLe LIDS (2), JOHNSTON & MURPHY SHOP,
CHeSTnuT HILL JOHNSTON & MURPHY SHOP
JOURNEYS (2), JOURNEYS KIDZ,
UNDERGROUND STATION (2)
neWPorT JOURNEYS
oWenSBoro JOURNEYS
PAduCAH HAT WORLD, JOURNEYS
dArTMouTH LIDS, JOURNEYS
dedHAM JOHNSTON & MURPHY SHOP
eAST BoSTon LIDS, JOHNSTON & MURPHY SHOP (2)
FoxBoro JOURNEYS
HAnover LIDS, JOURNEYS
HoLYoke LIDS, JOURNEYS, JOURNEYS KIDZ ,
ForSYTH JOURNEYS
gurnee LIDS (2), JOURNEYS, SHI
JoLIeT LIDS, JOURNEYS, UNDERGROUND STATION
LInCoLnWood LIDS, UNDERGROUND STATION
LoMBArd LIDS, JOURNEYS
MATTeSon HAT WORLD
MoLIne HAT WORLD, JOURNEYS
norrIdge LIDS, JOURNEYS,
UNDERGROUND STATION
georgIA
ALBAnY LIDS, JOURNEYS
ALPHAreTTA HAT SHACK, LIDS, JOURNEYS
ATHenS HAT SHACK, JOURNEYS
ATLAnTA HAT SHACK (2), LIDS (2), JARMAN SHOE STORE,
JOHNSTON & MURPHY SHOP (2),
JOURNEYS (3), SPORTS FAN-ATTIC,
UNDERGROUND STATION (3)
AuguSTA LIDS, JOURNEYS, HAT SHACK,
SPORTS FAN-ATTIC, UNDERGROUND STATION
BrunSWICk JOURNEYS
BuFord HAT SHACK, JOURNEYS, JOURNEYS KIDZ
CenTervILLe JOURNEYS
CoLuMBuS HAT SHACK, LIDS, JOURNEYS,
UNDERGROUND STATION
CoMMerCe LIDS, JOURNEYS
dALTon JOURNEYS
dAWSonvILLe LIDS, JOURNEYS,
JOHNSTON & MURPHY OUTLET
deCATur LIDS, JARMAN SHOE STORE
dougLASvILLe HAT SHACK, JOURNEYS,
JOURNEYS KIDZ
norTH rIverSIde LIDS, JOURNEYS,
LouISIAnA
UNDERGROUND STATION
ALexAndrIA LIDS, UNDERGROUND STATION
norTHBrook JOHNSTON & MURPHY SHOP
BATon rouge HAT SHACK, LIDS (2),
oAkBrook JOHNSTON & MURPHY SHOP
JOHNSTON & MURPHY SHOP, JOURNEYS (2),
orLAnd PArk LIDS, LIDS KIDS, JOURNEYS,
JOURNEYS KIDZ, UNDERGROUND STATION
JOURNEYS KIDZ
BoSSIer CITY HAT WORLD, JOURNEYS,
PeorIA LIDS, JOURNEYS, JOURNEYS KIDZ
UNDERGROUND STATION
roCkFord LIDS, JOURNEYS
SCHAuMBurg LIDS (2),
gonzALeS LIDS
greTnA JOURNEYS, LIDS, UNDERGROUND STATION
JOHNSTON & MURPHY SHOP, JOURNEYS
HouMA JOURNEYS
SPrIngFIeLd LIDS, JOURNEYS
kenner HAT SHACK, JARMAN SHOE STORE,
vernon HILLS LIDS, JOURNEYS
JOURNEYS, JOURNEYS KIDZ
WeST dundee LIDS, JOURNEYS
LAFAYeTTe LIDS, JOURNEYS, JOURNEYS KIDZ
duLuTH LIDS, JOURNEYS, SPORTS FAN-ATTIC,
IndIAnA
UNDERGROUND STATION
BLooMIngTon LIDS, JOURNEYS, JOURNEYS KIDZ
kenneSAW HAT SHACK, LIDS, JOURNEYS,
CLArkSvILLe HAT WORLD, JOURNEYS
JOURNEYS KIDZ, SHI, SPORTS FAN-ATTIC
edInBurgH LIDS
LAWrenCevILLe JOURNEYS,
evAnSvILLe LIDS, JOURNEYS, JOURNEYS KIDZ
LITHonIA HAT SHACK, JOURNEYS,
FT. WAYne HAT WORLD, JOURNEYS,
LAke CHArLeS LIDS, JOURNEYS,
UNDERGROUND STATION
MeTAIrIe JOHNSTON & MURPHY SHOP
Monroe LIDS, JOURNEYS, JOURNEYS KIDZ,
UNDERGROUND STATION
SHrevePorT JOURNEYS
SLIdeLL JOURNEYS
UNDERGROUND STATION
JOURNEYS KIDZ, LIDS KIDS, SHI
MACon HAT SHACK, LIDS, JOURNEYS (2),
greenWood LIDS, JOURNEYS, JOURNEYS KIDZ, SHI
MAIne
UNDERGROUND STATION
IndIAnAPoLIS HAT WORLD (2), LIDS (2),
BAngor LIDS, JOURNEYS
MorroW LIDS (2),UNDERGROUND STATION
JOHNSTON & MURPHY SHOP (3), JOURNEYS (2),
FreePorT LIDS
roMe LIDS, JOURNEYS
UNDERGROUND STATION (2), SHI
kITTerY JOHNSTON & MURPHY OUTLET
SAvAnnAH LIDS (2), JOURNEYS (2),
kokoMo JOURNEYS
SouTH PorTLAnd LIDS, JOURNEYS
SPORTS FAN-ATTIC, UNDERGROUND STATION
LAFAYeTTe HAT WORLD, JOURNEYS, JOURNEYS KIDZ
unIon CITY LIDS, UNDERGROUND STATION
MerrILLvILLe LIDS, JOURNEYS,
UNDERGROUND STATION
MICHIgAn CITY LIDS
MAnIToBA
WInnIPeg LIDS (2)
MArYLAnd
vALdoSTA JOURNEYS
HAWAII
AIeA LIDS, JOURNEYS, JOURNEYS KIDZ
HILo LIDS, JOURNEYS
HonoLuLu LIDS (3), JOURNEYS, HAT SHACK
kAHuLuI LIDS, JOURNEYS
kAILuA-konA LIDS
kAneoHe LIDS, JOURNEYS
LAHAInA LIDS
LIHue LIDS
WAIkoLoA LIDS
IdAHo
BoISe JOURNEYS, JOURNEYS KIDZ
IdAHo FALLS JOURNEYS
TWIn FALLS JOURNEYS
MISHAWAkA LIDS, JOURNEYS, JOURNEYS KIDZ, SHI
AnnAPoLIS LIDS (2), JOHNSTON & MURPHY SHOP,
MunCIe LIDS, JOURNEYS
JOURNEYS, JOURNEYS KIDZ
PLAInFIeLd LIDS, JOURNEYS
BALTIMore LIDS (2), JOHNSTON & MURPHY SHOP (2),
HArPer WoodS LIDS, UNDERGROUND STATION
rICHMond JOURNEYS
Terre HAuTe LIDS, JOURNEYS
IoWA
AMeS JOURNEYS
CedAr FALLS HAT WORLD, JOURNEYS
CorALvILLe HAT WORLD, JOURNEYS
CounCIL BLuFFS JOURNEYS
dAvenPorT HAT WORLD, JOURNEYS
deS MoIneS JOURNEYS (2)
SIoux CITY JOURNEYS
WATerLoo JOURNEYS
WeST deS MoIneS JOURNEYS (2)
JOURNEYS, JOURNEYS KIDZ, HAT WORLD,
HoWeLL LIDS, JOURNEYS
UNDERGROUND STATION
BeL AIr LIDS, JOURNEYS
BeTHeSdA LIDS, JOURNEYS
JACkSon HAT WORLD
LAnSIng LIDS, JOURNEYS, KOSITCHEK’S
LIvonIA JOHNSTON & MURPHY SHOP
CoLuMBIA LIDS, JOHNSTON & MURPHY SHOP,
MIdLAnd HAT WORLD, JOURNEYS
JOURNEYS
MuSkegon LIDS, JOURNEYS
FrederICk HAT WORLD, JOURNEYS
novI LIDS, JOHNSTON & MURPHY SHOP, JOURNEYS,
gAITHerSBurg LIDS, JOURNEYS,
JOURNEYS KIDZ, SHI
UNDERGROUND STATION
gLen BurnIe LIDS, JOURNEYS
okeMoS HAT WORLD, JOURNEYS
PorTAge LIDS, JOURNEYS
HAgerSToWn HAT WORLD, JOURNEYS,
roSevILLe LIDS, UNDERGROUND STATION
JOHNSTON & MURPHY OUTLET
SAgInAW HAT WORLD, JOURNEYS
88
LIDS KIDS, SHI
HYAnnIS LIDS, JOURNEYS
kIngSTon LIDS, JOURNEYS
LAneSBoro JOURNEYS
Lee JOHNSTON & MURPHY OUTLET
LeoMInSTer LIDS, JOURNEYS
MArLBoro LIDS, JOURNEYS
nATICk LIDS, JOURNEYS, LIDS KIDS,
JOHNSTON & MURPHY SHOP, SHI
norTH ATTLeBoro LIDS, JOURNEYS
PeABodY LIDS, JOURNEYS
SAuguS LIDS (2), JOURNEYS
SPrIngFIeLd JOURNEYS
SWAnSeA LIDS
TAunTon LIDS, JOURNEYS
WrenTHAM LIDS, JOHNSTON & MURPHY OUTLET,
JOURNEYS
MICHIgAn
Ann ArBor LIDS, JOURNEYS
AuBurn HILLS LIDS, JOHNSTON & MURPHY OUTLET,
JOURNEYS, JOURNEYS KIDZ, SHI
BATTLe Creek HAT WORLD, JOURNEYS
BIrCH run JOURNEYS
CLInTon ToWnSHIP SHI
deArBorn LIDS, JOURNEYS, UNDERGROUND STATION
FLInT LIDS, JOURNEYS, JOURNEYS KIDZ
ForT grATIoT LIDS, JOURNEYS
grAnd rAPIdS LIDS, JOHNSTON & MURPHY SHOP,
JOURNEYS
grAndvILLe HAT WORLD, JOURNEYS, SHI
green oAk ToWnSHIP JOURNEYS
G e n e s c o r e Ta i l s T o r e s A S O F 1 / 3 0 / 1 0
SouTHFIeLd HAT ZONE, UNDERGROUND STATION
neBrASkA
STerLIng HeIgHTS LIDS, JOHNSTON & MURPHY SHOP,
JOURNEYS, UNDERGROUND STATION
TAYLor LIDS, JOURNEYS, UNDERGROUND STATION
TrAverSe CITY LIDS, JOURNEYS
TroY LIDS, JOHNSTON & MURPHY SHOP, JOURNEYS (2),
UNDERGROUND STATION
WeSTLAnd LIDS, JOURNEYS,
UNDERGROUND STATION
MInneSoTA
ALBerTvILLe LIDS, JOURNEYS
BLAIne LIDS, JOURNEYS
BLooMIngTon LIDS (3), HATWORLD,
JOHNSTON & MURPHY SHOP, JOURNEYS,
JOURNEYS KIDZ, SHI, UNDERGROUND STATION
BrookLYn CenTer JOURNEYS
BurnSvILLe LIDS, JOURNEYS, JOURNEYS KIDZ
duLuTH LIDS, JOURNEYS
eden PrAIrIe JOURNEYS
MAnkATo JOURNEYS
MAPLe grove JOURNEYS
MAPLeWood JOURNEYS
MInneTonkA LIDS, JOURNEYS
roCHeSTer LIDS, JOURNEYS
LInCoLn LIDS, JOURNEYS (2)
oMAHA LIDS, JOURNEYS (2)
nevAdA
HenderSon LIDS, JOURNEYS, JOURNEYS KIDZ
LAS vegAS LIDS (8), JOHNSTON & MURPHY OUTLET,
JOHNSTON & MURPHY SHOP, JOURNEYS (7),
JOURNEYS KIDZ, UNDERGROUND STATION
PrIMM JOURNEYS
reno JOURNEYS (2), LIDS
neW BrunSWICk
dIePPe LIDS
FrederICTon LIDS
ST. JoHn LIDS
neW HAMPSHIre
ConCord LIDS, JOURNEYS
MAnCHeSTer LIDS, JOURNEYS
nASHuA LIDS, JOURNEYS
neWIngTon LIDS, JOURNEYS
norTH ConWAY LIDS, JOURNEYS
SALeM LIDS, JOURNEYS
neW JerSeY
roSevILLe HAT WORLD, JOURNEYS, SHI
BrIdgeWATer LIDS, JOHNSTON & MURPHY SHOP,
ST. CLoud HAT WORLD, JOURNEYS
JOURNEYS
ST. PAuL LIDS (2), JOHNSTON & MURPHY SHOP,
BurLIngTon UNDERGROUND STATION
JOURNEYS KIDZ, GREAT PLAINS
WoodBurY JOURNEYS
MISSISSIPPI
BILoxI HAT SHACK, JOURNEYS,
UNDERGROUND STATION
greenvILLe JOURNEYS
guLFPorT LIDS
HATTIeSBurg HAT SHACK, JOURNEYS,
JOURNEYS KIDZ
JACkSon HAT WORLD, UNDERGROUND STATION
MerIdIAn HAT SHACK, JOURNEYS
rIdgeLAnd HAT WORLD, JOURNEYS, JOURNEYS KIDZ
SouTHAven JOURNEYS
TuPeLo LIDS, JOURNEYS
MISSourI
BrAnSon LIDS, JOURNEYS
CAPe gIrArdeAu LIDS, JOURNEYS
CHerrY HILL LIDS, JOHNSTON & MURPHY SHOP,
JOURNEYS, UNDERGROUND STATION
dePTFord LIDS, JOURNEYS, JOURNEYS KIDZ
eAST BrunSWICk LIDS, JOURNEYS
eATonToWn LIDS, JOURNEYS, JOURNEYS KIDZ, SHI
edISon LIDS
eLIzABeTH HAT SHACK, LIDS, JOURNEYS,
JOURNEYS KIDZ
FreeHoLd HAT WORLD, JOURNEYS
JACkSon JOURNEYS
JerSeY CITY LIDS, JOURNEYS, SHI
LAWrenCevILLe LIDS, JOURNEYS,
UNDERGROUND STATION
LIvIngSTon LIDS, JOURNEYS
MArLTon JOHNSTON & MURPHY SHOP
MAYS LAndIng LIDS, JOURNEYS, JOURNEYS KIDZ
MooreSToWn LIDS, JOURNEYS
neWArk JOHNSTON & MURPHY SHOP
CHeSTerFIeLd LIDS, JOHNSTON & MURPHY SHOP,
PArAMuS LIDS (3), JOURNEYS, JOURNEYS KIDZ,
JOURNEYS, JOURNEYS KIDZ, SPORTS FAN-ATTIC
CoLuMBIA LIDS, JOURNEYS
deS PereS JOURNEYS, JOURNEYS KIDZ, SHI
FLorISSAnT UNDERGROUND STATION
HAzeLWood LIDS, JOURNEYS
IndePendenCe LIDS, JOURNEYS,
JOURNEYS KIDZ, SHI
JoPLIn HAT WORLD, JOURNEYS
kAnSAS CITY LIDS, JOURNEYS
oSAge BeACH LIDS, JOURNEYS,
JOHNSTON & MURPHY OUTLET
UNDERGROUND STATION, SHI
roCkAWAY LIDS, JOURNEYS, SHI
SHorT HILLS JOHNSTON & MURPHY SHOP
TInTon FALLS LIDS, JOHNSTON & MURPHY OUTLET
ToMS rIver LIDS, JOURNEYS
WoodBrIdge LIDS (2), JOURNEYS,
JOURNEYS KIDZ, SHI
neW MexICo
ALBuquerque LIDS (2), JOURNEYS (2),
JOURNEYS KIDZ (2), UNDERGROUND STATION (2), SHI
SPrIngFIeLd LIDS, JOURNEYS, JOURNEYS KIDZ
ST. Ann HAT ZONE, UNDERGROUND STATION
ST. JoSePH LIDS, JOURNEYS
ST. LouIS LIDS (3), JOHNSTON & MURPHY SHOP (2),
JOURNEYS (2), JOURNEYS KIDZ, SPORTS FAN-ATTIC,
CLovIS JOURNEYS
FArMIngTon JOURNEYS
gALLuP JOURNEYS
LAS CruCeS JOURNEYS
SAnTA Fe JOURNEYS
UNDERGROUND STATION
ST. PeTerS LIDS, JOURNEYS, JOURNEYS KIDZ, SHI,
neW York
Genesco inc. AND SUBSIDIARIES
Bronx LIDS
JACkSonvILLe LIDS, JOURNEYS,
BrookLYn LIDS (2), JOURNEYS,
UNDERGROUND STATION
UNDERGROUND STATION
BuFFALo LIDS, JOURNEYS (2),
PInevILLe HAT SHACK, JOURNEYS, SPORTS FAN-ATTIC
rALeIgH HAT SHACK, LIDS, JOHNSTON & MURPHY SHOP,
UNDERGROUND STATION, LIDS KIDS
JOURNEYS (2), JOURNEYS KIDZ, SHI
CenTrAL vALLeY LIDS,
roCkY MounT LIDS, UNDERGROUND STATION
JOHNSTON & MURPHY OUTLET
SMITHFIeLd JOURNEYS
CLAY JOURNEYS
deer PArk LIDS, JOURNEYS
deWITT JOURNEYS
eLMHurST LIDS, JOURNEYS,
WILMIngTon LIDS, JOURNEYS, JOURNEYS KIDZ,
SPORTS FAN-ATTIC
WInSTon-SALeM LIDS, JOURNEYS,
JOURNEYS KIDZ, SHI, SPORTS FAN-ATTIC
UNDERGROUND STATION, LIDS KIDS
FLuSHIng LIDS
gArden CITY LIDS (2), JOHNSTON & MURPHY SHOP,
JOURNEYS
greeCe JOURNEYS
HICkSvILLe LIDS, JOURNEYS
HorSeHeAdS LIDS, JOURNEYS
norTH dAkoTA
BISMArCk LIDS, JOURNEYS
FArgo LIDS, JOURNEYS
grAnd ForkS LIDS, JOURNEYS
MInoT JOURNEYS
novA SCoTIA
HunTIngTon STATIon JOHNSTON & MURPHY SHOP
dArTMouTH LIDS
JoHnSon CITY LIDS, JOURNEYS, JOURNEYS KIDZ
HALIFAx LIDS
kIngSTon JOURNEYS
LAke grove LIDS, JOURNEYS, LIDS KIDS,
JOURNEYS KIDZ, SHI
LAkeWood LIDS
MASSAPequA LIDS, JOURNEYS, JOURNEYS KIDZ
MIddLeToWn LIDS, JOURNEYS
neW HArTFord LIDS, JOURNEYS
neW York LIDS (5), JOHNSTON & MURPHY SHOP (2),
JOURNEYS (2)
nIAgArA FALLS LIDS, JOHNSTON & MURPHY OUTLET,
JOURNEYS
PLATTSBurgH LIDS, JOURNEYS
PougHkeePSIe LIDS, JOURNEYS
rIverHeAd LIDS, JOURNEYS
roCHeSTer LIDS (2), JOURNEYS,
UNDERGROUND STATION
roTTerdAM JOURNEYS
SArATogA SPrIngS HAT WORLD, JOURNEYS
STATen ISLAnd LIDS, JOURNEYS,
UNDERGROUND STATION
SYrACuSe LIDS, JOURNEYS, JOURNEYS KIDZ
vALLeY STreAM LIDS, JOURNEYS
vICTor LIDS, JOHNSTON & MURPHY SHOP, JOURNEYS
WATerLoo LIDS, JOURNEYS
WATerToWn LIDS, JOURNEYS
WeST nYACk JOURNEYS, LIDS,
UNDERGROUND STATION, SHI
WHITe PLAInS LIDS (2), JOURNEYS,
UNDERGROUND STATION
WILLIAMSvILLe JOURNEYS
YorkToWn HeIgHTS JOURNEYS
oHIo
Akron LIDS (2), JOURNEYS (2)
AurorA JOURNEYS
BeACHWood JOHNSTON & MURPHY SHOP
BeAverCreek JOURNEYS KIDZ, HAT WORLD,
JOURNEYS (2)
CAnTon LIDS, JOURNEYS, JOURNEYS KIDZ
CInCInnATI HAT WORLD, HAT ZONE, LIDS (2),
JOHNSTON & MURPHY SHOP,
JOURNEYS (4), JOURNEYS KIDZ,
UNDERGROUND STATION (2)
CLeveLAnd LIDS, JOHNSTON & MURPHY SHOP (2),
UNDERGROUND STATION
CoLuMBuS HAT WORLD, LIDS (2), JOHNSTON &
MURPHY SHOP, JOURNEYS, JOURNEYS KIDZ, SHI,
SPORTS FAN-ATTIC, UNDERGROUND STATION
dAYTon LIDS (2), JOURNEYS, SHI
duBLIn HAT ZONE, JOURNEYS, JOURNEYS KIDZ, SHI
eLYrIA LIDS, JOURNEYS
FIndLAY JOURNEYS
HeATH JOURNEYS
JeFFerSonvILLe JOHNSTON & MURPHY OUTLET,
JOURNEYS
LAnCASTer HAT WORLD, JOURNEYS
LIMA LIDS, JOURNEYS
MAnSFIeLd HAT WORLD, JOURNEYS
MAuMee LIDS, JOURNEYS
MenTor LIDS, JOURNEYS
Monroe HAT WORLD, JOHNSTON & MURPHY OUTLET
nILeS JOURNEYS, HAT WORLD
norTH oLMSTed LIDS, JOURNEYS
PArMA LIDS, JOURNEYS
ASHevILLe LIDS, JOURNEYS, UNDERGROUND STATION
rICHMond HeIgHTS UNDERGROUND STATION
BurLIngTon JOURNEYS
SAnduSkY LIDS, JOURNEYS
CArY HAT SHACK, LIDS, JOURNEYS
SPrIngFIeLd JOURNEYS
CHArLoTTe LIDS (4), JOHNSTON & MURPHY SHOP (3),
ST. CLAIrSvILLe HAT WORLD
JOURNEYS, SPORTS FAN-ATTIC,
STrongSvILLe LIDS, JOHNSTON & MURPHY SHOP,
UNDERGROUND STATION (2)
JOURNEYS, JOURNEYS KIDZ, SHI
ConCord HAT SHACK, LIDS, JOURNEYS (2)
ToLedo LIDS, JOURNEYS, SHI, UNDERGROUND STATION
durHAM LIDS, JOURNEYS, SPORTS FAN-ATTIC,
WeSTLAke JOURNEYS
UNDERGROUND STATION
YoungSToWn LIDS, JOURNEYS
FAYeTTevILLe LIDS, JOURNEYS, JOURNEYS KIDZ,
zAneSvILLe HAT WORLD
UNDERGROUND STATION
gASTonIA HAT WORLD, JOURNEYS, SPORTS FAN-ATTIC
okLAHoMA
BArTLeSvILLe JOURNEYS
LAWTon LIDS, JOURNEYS
norMAn LIDS, JOURNEYS
okLAHoMA CITY HAT WORLD (2), LIDS,
JOURNEYS (3), JOURNEYS KIDZ (2)
SHAWnee JOURNEYS
SPORTS FAN-ATTIC
MonTAnA
BILLIngS LIDS, JOURNEYS
BozeMAn LIDS
MISSouLA JOURNEYS
ALBAnY LIDS (3), JOURNEYS, JOURNEYS KIDZ,
goLdSBoro JOURNEYS
UNDERGROUND STATION, SHI
AMHerST HAT WORLD, JOURNEYS
AuBurn JOURNEYS
greenSBoro HAT SHACK, LIDS, JARMAN SHOE STORE,
JOHNSTON & MURPHY SHOP, JOURNEYS,
SPORTS FAN-ATTIC, UNDERGROUND STATION
BAY SHore LIDS, JOURNEYS, JOURNEYS KIDZ
greenvILLe UNDERGROUND STATION
HICkorY HAT SHACK, JOURNEYS, SPORTS FAN-ATTIC
89
WAYne LIDS, JOURNEYS, UNDERGROUND STATION
norTH CAroLInA
Genesco inc. AND SUBSIDIARIES
G e n e s c o r e Ta i l s T o r e s A S O F 1 / 3 0 / 1 0
TuLSA LIDS (2), JOURNEYS (2), JOURNEYS KIDZ,
SeLInSgrove HAT WORLD
CLArkSvILLe HAT WORLD, JOURNEYS
LuBBoCk HAT WORLD, JOURNEYS, JOURNEYS KIDZ,
SCArBorougH HEAD QUARTERS
UNDERGROUND STATION, SHI
SPrIngFIeLd LIDS, JOURNEYS
CoLLIervILLe LIDS, JOURNEYS
UNDERGROUND STATION
STATe CoLLege HAT WORLD, JOURNEYS
FrAnkLIn HAT WORLD, JOHNSTON & MURPHY SHOP,
LuFkIn JOURNEYS
STroudSBurg LIDS, JOURNEYS
JOURNEYS, JOURNEYS KIDZ, SHI
MCALLen LIDS, JARMAN SHOE STORE, JOURNEYS,
TAnnerSvILLe JOHNSTON & MURPHY OUTLET,
gATLInBurg LIDS
JOURNEYS KIDZ, UNDERGROUND STATION
JOURNEYS
TArenTuM LIDS, JOURNEYS
unIonToWn HAT WORLD
goodLeTTSvILLe LIDS, JOURNEYS,
MerCedeS JOURNEYS, JOHNSTON & MURPHY OUTLET
UNDERGROUND STATION
MeSquITe LIDS (2), JOURNEYS, JOURNEYS KIDZ,
JACkSon HAT WORLD, JOURNEYS
UNDERGROUND STATION
WASHIngTon HAT WORLD, LIDS, JOURNEYS
JoHnSon CITY LIDS, JOURNEYS
MIdLAnd LIDS, JOURNEYS, JOURNEYS KIDZ
WeST MIFFLIn LIDS (2), JOURNEYS, JOURNEYS KIDZ
knoxvILLe HAT WORLD, LIDS, JOURNEYS (3)
odeSSA LIDS, JOURNEYS
WHITeHALL LIDS, JOURNEYS
MeMPHIS JOHNSTON & MURPHY SHOP,
PASAdenA JOURNEYS
WILkeS-BArre HAT WORLD, JOURNEYS
JOURNEYS (2), JOURNEYS KIDZ,
PeArLAnd LIDS, JOURNEYS
WILLoW grove HAT WORLD, JOURNEYS, SHI
WYoMISSIng LIDS, JOURNEYS
York JOURNEYS
PuerTo rICo
AguAdILLA JOURNEYS
UNDERGROUND STATION
MorrISToWn JOURNEYS
MurFreeSBoro HAT WORLD, LIDS, JOURNEYS
nASHvILLe LIDS, JOHNSTON & MURPHY OUTLET,
PLAno LIDS (2), JOHNSTON & MURPHY SHOP,
JOURNEYS
PorT ArTHur JOURNEYS
round roCk LIDS, JOHNSTON & MURPHY OUTLET,
JOHNSTON & MURPHY SHOP, JOURNEYS,
JOURNEYS
BArCeLoneTA LIDS, JOURNEYS
JOURNEYS KIDZ, SHI
BAYAMon LIDS (2), JOURNEYS (2), JOURNEYS KIDZ
CAguAS LIDS (3), JOURNEYS (2), JOURNEYS KIDZ, SHI
CAnovAnAS LIDS, JOURNEYS
CAroLInA LIDS, JOURNEYS,
SevIervILLe LIDS, JOHNSTON & MURPHY OUTLET,
JOURNEYS
TexAS
SAn AngeLo HAT WORLD, JOURNEYS
SAn AnTonIo LIDS (7), JARMAN SHOE STORE,
JOHNSTON & MURPHY SHOP (2), JOURNEYS (6),
JOURNEYS KIDZ (2), UNDERGROUND STATION (2), SHI
SAn MArCoS LIDS, JOHNSTON & MURPHY OUTLET,
SHerBrooke LIDS
CorPuS CHrISTI LIDS, JOURNEYS, JOURNEYS KIDZ,
FAJArdo JOURNEYS
guAYAMA JOURNEYS
HATILLo LIDS, JOURNEYS
HATo reY JOURNEYS
HuMACAo LIDS, JOURNEYS
ISABeLA LIDS, JOURNEYS
MAYAguez LIDS, JOURNEYS (2), JOURNEYS KIDZ
PonCe LIDS, JOURNEYS
SAn JuAn LIDS, JOURNEYS KIDZ
SIerrA BAYAMon JOURNEYS
vegA ALTA LIDS, JOURNEYS
queBeC
LASALLe LIDS
LAvAL LIDS
rHode ISLAnd
ProvIdenCe LIDS (2), JOHNSTON & MURPHY SHOP,
ABILene HAT WORLD, JOURNEYS
AMArILLo LIDS, JOURNEYS, JOURNEYS KIDZ
ArLIngTon LIDS (2), JOURNEYS, JOURNEYS KIDZ,
JOURNEYS, JOURNEYS KIDZ, SHI
SHerMAn JOURNEYS
SPrIng LIDS
SHI, UNDERGROUND STATION
SugArLAnd LIDS, JOURNEYS, JOURNEYS KIDZ
AuSTIn LIDS (3), JOHNSTON & MURPHY SHOP,
TeMPLe JOURNEYS
JOURNEYS (3), UNDERGROUND STATION
TexArkAnA LIDS, JOURNEYS
BAYToWn JOURNEYS
THe WoodLAndS JOURNEYS, JOURNEYS KIDZ
BeAuMonT LIDS, JOURNEYS, JOURNEYS KIDZ,
TYLer LIDS, JOURNEYS, UNDERGROUND STATION
UNDERGROUND STATION
BroWnSvILLe LIDS, JOURNEYS, JOURNEYS KIDZ,
vICTorIA JOURNEYS
WACo LIDS, JOURNEYS
UNDERGROUND STATION
WICHITA FALLS LIDS, JOURNEYS
CAnuTILLo JOHNSTON & MURPHY OUTLET, JOURNEYS
CedAr PArk HAT WORLD, JOURNEYS,
JOURNEYS KIDZ
CoLLege STATIon HAT WORLD, JOURNEYS
Conroe LIDS
u.S. vIrgIn ISLAndS
ST. THoMAS JOURNEYS
uTAH
LAYTon JOURNEYS
LogAn JOURNEYS
SHI, UNDERGROUND STATION
MurrAY LIDS, JOURNEYS, JOURNEYS KIDZ
CYPreSS JOHNSTON & MURPHY OUTLET, LIDS
ogden LIDS, JOURNEYS
dALLAS HAT WORLD, LIDS (2),
oreM LIDS, JOURNEYS, JOURNEYS KIDZ
JOHNSTON & MURPHY SHOP (3), JOURNEYS (3),
PArk CITY JOURNEYS
JOURNEYS KIDZ, UNDERGROUND STATION (2)
Provo JOURNEYS
denTon HAT WORLD, JOURNEYS
SALT LAke CITY LIDS, JOURNEYS
SAndY JOURNEYS, JOURNEYS KIDZ, SHI
SouTH CAroLInA
AnderSon HAT WORLD, JOURNEYS
BLuFFTon JOHNSTON & MURPHY OUTLET,
eAgLe PASS JOURNEYS
JOURNEYS
eL PASo HAT ZONE (2), JOURNEYS (3),
ST. george JOURNEYS
CHArLeSTon HAT SHACK, LIDS, JOURNEYS,
JOURNEYS KIDZ (2), SHI
WeST vALLeY CITY JOURNEYS
HAT WORLD
ForT WorTH HAT WORLD, LIDS, JARMAN SHOE STORE,
CoLuMBIA HAT WORLD (2), LIDS, JOURNEYS (3),
JOURNEYS (2), UNDERGROUND STATION
SPORTS FAN-ATTIC, UNDERGROUND STATION
FrIendSWood LIDS, JOURNEYS,
FLorenCe HAT WORLD, JOURNEYS
JOURNEYS KIDZ, SHI
gAFFneY JOURNEYS
FrISCo HAT WORLD, JOURNEYS, JOURNEYS KIDZ, SHI
verMonT
BurLIngTon LIDS, JOURNEYS
MAnCHeSTer JOHNSTON & MURPHY OUTLET
SouTH BurLIngTon LIDS, JOURNEYS
greenvILLe LIDS, LIDS KIDS, JARMAN SHOE STORE,
gArLAnd LIDS, JOURNEYS
vIrgInIA
JOURNEYS, JOURNEYS KIDZ, SPORTS FAN-ATTIC
grAPevIne LIDS, JOURNEYS
ArLIngTon HAT ZONE, JOHNSTON & MURPHY SHOP,
MYrTLe BeACH LIDS (4), JOHNSTON & MURPHY OUTLET,
HArLIngen LIDS, JOURNEYS
JOURNEYS, UNDERGROUND STATION
JOURNEYS (2), SPORTS FAN-ATTIC
HouSTon LIDS (8), JOHNSTON & MURPHY SHOP (2),
CHArLoTTeSvILLe HAT WORLD, JOURNEYS
norTH CHArLeSTon JOURNEYS (2),
JOURNEYS (8), JOURNEYS KIDZ (2),
CHeSAPeAke HAT WORLD (2), JOURNEYS (2),
UNDERGROUND STATION
SPORTS FAN-ATTIC (2), UNDERGROUND STATION (5)
UNDERGROUND STATION
norTH MYrTLe BeACH LIDS
HuMBLe LIDS, JOURNEYS, JOURNEYS KIDZ, SHI,
CHrISTIAnSBurg HAT WORLD, JOURNEYS
SPArTAnBurg LIDS, JOURNEYS,
SPORTS FAN-ATTIC, UNDERGROUND STATION
CoLonIAL HeIgHTS HAT WORLD,
UNDERGROUND STATION
HurST LIDS, JOURNEYS
UNDERGROUND STATION
UNDERGROUND STATION
onTArIo
BArrIe CAP CONNECTION
BeLLevILLe LIDS
BrAMPTon LIDS
BrAnTFord LIDS
BurLIngTon LIDS
CAMBrIdge HEAD QUARTERS
gueLPH LIDS
HAMILTon HEAD QUARTERS
kIngSTon LIDS
kITCHner LIDS
London LIDS (2)
MISSISSAugA LIDS (2), HEAD QUARTERS
neWMArkeT HEAD QUARTERS
nIAgArA FALLS LIDS
norTH BAY CAP CONNECTION
oSHAWA LIDS
oTTAWA LIDS (2)
PICkerIng LIDS
SArnIA LIDS
ST. CATHArIneS LIDS
SudBurY LIDS
THornHILL LIDS
ToronTo HEAD QUARTERS, LIDS (2)
vAugHn HEAD QUARTERS
WATerLoo LIDS
WIndSor HEAD QUARTERS
oregon
eugene LIDS, JOURNEYS
MedFord HAT WORLD, JOURNEYS
PorTLAnd LIDS (2), JOURNEYS (2)
SALeM LIDS, JOURNEYS
TIgArd LIDS, JOURNEYS
WoodBurn LIDS, JOURNEYS
PennSYLvAnIA
ALToonA LIDS, JOURNEYS
BenSALeM LIDS, JOURNEYS
CAMP HILL HAT WORLD, JOURNEYS
JOURNEYS
CenTer vALLeY LIDS, JOHNSTON & MURPHY SHOP,
JOURNEYS
dICkSon CITY JOURNEYS
erIe LIDS, JOURNEYS
exTon LIDS, JOURNEYS, JOURNEYS KIDZ
greenSBurg HAT WORLD, JOURNEYS
grove CITY JOHNSTON & MURPHY OUTLET,
JOURNEYS
HArrISBurg LIDS, JOURNEYS (2)
HoMeSTeAd JOURNEYS
JoHnSToWn LIDS
kIng oF PruSSIA LIDS, JOHNSTON & MURPHY
SHOP, JOURNEYS, JOURNEYS KIDZ
LAnCASTer LIDS (2), JOHNSTON & MURPHY OUTLET,
JOURNEYS
LAngHorne LIDS, JOURNEYS, JOURNEYS KIDZ
MedIA LIDS, JOURNEYS, UNDERGROUND STATION
MonACA HAT WORLD, JOURNEYS
MonroevILLe LIDS, JOHNSTON & MURPHY SHOP,
JOURNEYS
MooSIC LIDS, JOURNEYS
norTH WALeS LIDS, JOURNEYS, JOURNEYS KIDZ
UNDERGROUND STATION (2)
PITTSBurgH LIDS (3), JOHNSTON & MURPHY SHOP (3),
JOURNEYS (3), JOURNEYS KIDZ, HAT WORLD
PLYMouTH MeeTIng JOURNEYS
PoTTSToWn JOHNSTON & MURPHY OUTLET, LIDS
SCrAnTon LIDS (2), JOURNEYS
PHILAdeLPHIA LIDS (4), JOHNSTON & MURPHY SHOP,
SIoux FALLS HAT WORLD, JOURNEYS
SouTH dAkoTA
rAPId CITY LIDS, JOURNEYS
IrvIng LIDS, JOURNEYS, JOURNEYS KIDZ,
dAnvILLe HAT SHACK, JOURNEYS
UNDERGROUND STATION
kATY LIDS, JOURNEYS
duLLeS LIDS, JOURNEYS
FAIrFAx LIDS, JOHNSTON & MURPHY SHOP,
kILLeen HAT WORLD, JOURNEYS, JOURNEYS KIDZ
JOURNEYS
TenneSSee
LAke JACkSon LIDS, JOURNEYS
FrederICkSBurg HAT WORLD, JOURNEYS
AnTIoCH LIDS, JOURNEYS, JOURNEYS KIDZ,
LAredo LIDS, JOURNEYS, JOURNEYS KIDZ,
gLen ALLen LIDS, JOURNEYS,
UNDERGROUND STATION
BArTLeTT LIDS
UNDERGROUND STATION
UNDERGROUND STATION
LeWISvILLe JOURNEYS, JOURNEYS KIDZ
HArrISonBurg LIDS, JOURNEYS
CHATTAnoogA LIDS (2), JOURNEYS, JOURNEYS KIDZ
LongvIeW LIDS, JOURNEYS
LeeSBurg JOHNSTON & MURPHY OUTLET
90
G e n e s c o r e Ta i l s T o r e s A S O F 1 / 3 0 / 1 0
Genesco inc. AND SUBSIDIARIES
LYnCHBurg HAT WORLD, JOURNEYS
MAnASSAS LIDS, JOURNEYS
MCLeAn LIDS, JOHNSTON & MURPHY SHOP, JOURNEYS
neWPorT neWS HAT WORLD, JOURNEYS,
UNDERGROUND STATION
norFoLk LIDS (2), JOHNSTON & MURPHY SHOP,
JOURNEYS, UNDERGROUND STATION (2)
rICHMond HAT WORLD, LIDS, JOURNEYS (3),
JOHNSTON & MURPHY SHOP
roAnoke LIDS, JOURNEYS
SPrIngFIeLd JOURNEYS
vIrgInIA BeACH LIDS (2), JOURNEYS (2),
JOHNSTON & MURPHY SHOP
WILLIAMSBurg LIDS, JOHNSTON & MURPHY
OUTLET, JOURNEYS (2)
WInCHeSTer LIDS, JOURNEYS
WoodBrIdge LIDS, JOURNEYS
WASHIngTon
AuBurn LIDS, JOURNEYS
BeLLevue LIDS, JOHNSTON & MURPHY SHOP
BeLLIngHAM LIDS, JOURNEYS
BurLIngTon JOURNEYS
evereTT LIDS, JOURNEYS
kenneWICk LIDS, JOURNEYS, JOURNEYS KIDZ
kenT JOURNEYS
LYnnWood LIDS, JOURNEYS
oLYMPIA LIDS, JOURNEYS, JOURNEYS KIDZ
PuYALLuP LIDS, JOURNEYS
redMond JOURNEYS
SeATTLe LIDS (2), JOURNEYS (2), JOURNEYS KIDZ
SILverdALe LIDS, JOURNEYS
SPokAne LIDS, JOURNEYS (2)
TACoMA LIDS, JOURNEYS
TukWILA LIDS
TuLALIP LIDS, JOHNSTON & MURPHY OUTLET,
JOURNEYS
unIon gAP JOURNEYS
vAnCouver LIDS, JOURNEYS, JOURNEYS KIDZ
WeST vIrgInIA
BArBourSvILLe HAT WORLD, JOURNEYS,
JOURNEYS KIDZ
BrIdgePorT HAT WORLD, JOURNEYS
CHArLeSTon LIDS, JOURNEYS, JOURNEYS KIDZ
MorgAnToWn HAT WORLD, JOURNEYS
PArkerSBurg HAT WORLD, JOURNEYS
WISConSIn
APPLeTon LIDS, JOURNEYS
BArABoo LIDS, JOURNEYS
BrookFIeLd LIDS, JOURNEYS
eAu CLAIre JOURNEYS
gLendALe LIDS, JOURNEYS,
JOHNSTON & MURPHY SHOP
green BAY LIDS, JOURNEYS
greendALe LIDS, JOURNEYS
JAneSvILLe LIDS, JOURNEYS
LACroSSe JOURNEYS
MAdISon LIDS (3), JOURNEYS (2)
MILWAukee LIDS, UNDERGROUND STATION
oSHkoSH JOURNEYS
PLeASAnT PrAIrIe JOHNSTON & MURPHY OUTLET,
JOURNEYS
rACIne LIDS, JOURNEYS
WAuWAToSA HAT WORLD, JOURNEYS
WYoMIng
CASPer JOURNEYS
CHeYenne JOURNEYS
91
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