Genesco Focusing on Omnichannel Rollouts, Growth

Jun 02, 2014 5:10 PM  By

The head of specialty sportswear retailer Genesco said on the company’s Q1 earnings call that it plans to implement several aspects of its omnichannel strategy later this year, seeing it as a significant growth area.

Bob Dennis, president, chairman and CEO of Genesco, said the company is rolling out a wide range of capabilities this year to grow its omnichannel business, including implementing new front-end e-commerce systems, installing new order management systems, building new systems architecture to accelerate cross-channel abilities and investing in new warehouse systems to enhance direct order shipments.

The company expects to begin rollout of these initiatives in phases late in the second quarter. This will make a “meaningfully greater” number of SKUs available to web shoppers since as much as 70% to 80% of Lids inventories is in its stores,” Dennis said.

“This will allow customers to interact seamlessly with us across one channel to another,” Dennis told analysts and investors. “We are ambitious in our aspirations to serve customers in whichever channel they prefer to shop.”

Genesco’s direct sales growth continued to outpace comparable store growth for the quarter, Dennis said, although not as notably as in recent quarters.

He said the company’s digital strategy for its Lids Sports Group is to cater to displaced fans who want to support their favorite teams from out of market. Its current platform allows Genesco to do this in a number of ways, and the company is working on additional features to enhance the consumer experience, including increased product selection, improved delivery and return options.

“For example, our more than 900 Lids stores and nearly 200 Locker Room and clubhouse locations make it convenient for customers to do things like return product purchased online in any concept to any local store,” Dennis said. “We believe customers will prefer these capabilities delivered through a combination of brick-and-mortar presence and digital offerings which will position us well and offer competitive advantages over pure-play retailers.”

Genesco expects to launch a new lids.com website and e-commerce platform in late summer or early fall that will feature an updated look and feel as well as enhanced functionality. Dennis said customers will benefit from greater ease-of-use and Lids will be able to offer among other things personalization based on the customer’s omnichannel history.

“These upgrades will also allow the customer to buy online and ship-it-to-the-store, which will aid Lids in driving traffic to the store,” he said.

Genesco’s first quarter total sales were up 6% to $629 million, in line with expectations. Consolidated comp sales were up 1%, with store sales flat and direct comparable sales up 3%. Adjusted earnings per share was $0.81, down from $0.94 in the year-ago quarter, but still slightly ahead of plan for reaching full-year EPS guidance.