US shoe group steps into UK market with acquisition of Schuh

Genesco, a US shoe and hat retailer, said it bought Schuh for £100m ($161.9m) to gain a foothold in the British domestic market.

Nashville-based Genesco said the deal will boost its earnings per share in the current financial year.

Schuh was founded 30 years ago and has a reputation for stocking fashionable brands and employing a youthful workforce.

It operates 59 stores in Britain and Ireland including two in Leeds, two in Sheffield and one in Hull. It also has 16 concessions including one in Doncaster.

The Livingston-based firm generated sales of about £164m for the 12 months to March 27 and yesterday it said it would distribute £37.3m of the sale proceeds to staff.

Robert J. Dennis, chief executive of Genesco, which makes Journeys and Johnston & Murphy brands, said Schuh gave it an insight into global fashion trends.

“The concept is similar to Journeys in customer demographics, product offering and operating philosophy, so it is a business we know and understand. At the same time, we believe that the combined businesses will benefit from significant merchandising synergies and from many opportunities to share best practices to our mutual benefit.

“Financially, the Schuh business is compelling, with attractive store economics and solid growth prospects.”

The purchase agreement also provides for deferred purchase price payments totalling £25m, Genesco said in a statement.

Colin Temple, managing director of Schuh, said the retailer wants to quicken its growth plans for Britain.

“Schuh has gained significant market share in recent years due to a strong product assortment and a growing store base.

“Like Journeys, a Genesco nameplate that operates in the US and Canada, we specialise in providing our customers with branded casual and athletic footwear styles that are in line with current fashion trends and with a breadth and depth of assortment that is difficult to find elsewhere.”

Last year Kraft’s takeover of Cadbury sparked fury among workers and MPs.

The US company changed its mind about keeping open the Somerdale factory, near Bristol, after the deal went through, leading to the loss of hundreds of jobs. Chief executive Irene Rosenfeld later refused to appear in person, or to use a videolink from the US, before a House of Commons committee examining the company’s plans.

There is no suggestion Genesco is cutting Schuh jobs.

Genesco was advised on the deal by Jefferies & Company and Schuh by Noble Grossart.

[email protected]