“Turning around the Journeys business remains our number one priority.”
—Genesco CEO Mimi Vaughn


With the new Journeys leadership in place since the beginning of 2024, the company expressed that the pieces are in place to turn the tide at the teen footwear retail destination.

With a new group president appointed at Vans, the two companies could help accelerate their respective turnaround plans in sitting down and figuring it out together.

During Genesco’s first quarter conference call with analysts, the word “vulcanized” garnered a lot of usage and interest; however, it is unclear if it is an industry-wide vulcanized product issue or one that is Vans-centric, given Genesco management suggesting that some brands have vulcanized that is working. Regardless, both brands have their futures tied to figuring out where the business has gone and how to respond.

Focused on the company’s top priority is a group of newer faces (to Genesco) that will take ownership in executing the turnaround plan moving forward.

Genesco, Inc. appointed Andy Gray as president of the Journeys Group in January 2024, bringing the two-decade Foot Locker veteran into the fold to lead brand efforts. He replaced Mario Gallione, who announced his retirement plans in August 2023, with an expected effective date at the end of the retailer’s fiscal year-end in February.

Gray held numerous senior leadership roles at Foot Locker, including EVP, global president of Foot Locker, Kids Foot Locker, Champs and Sidestep, and EVP, global chief commercial officer.

In February, Genesco added another Foot Locker veteran, Chris Santaella, as EVP and chief merchant for Journeys Group. Santaella replaced Pete Hicks, who retired in October 2023. Santaella had worked in successive roles at Foot Locker for over three decades, most recently as senior vice president and chief merchandising officer for Foot Locker, Kids Foot Locker and Champs Sports. He led a 125-person global product organization, which included divisional buying teams, global product development and product strategy teams. Santaella leads buying, merchandising, planning, and product strategies in his new role at Journeys Group, reporting to Gray.

Vaughn said a search is underway for a chief marketing officer, and “we have established a new strategy and transformation role to oversee the creation and execution of our ongoing plan.”

Nailing Down The Plan
“Although product advantages won’t be fully evident until the back half, Andy Gray, Journeys’ new president, and the team have been hard at work to rapidly accelerate the pace of Journeys improvement,” said Vaughn. She also noted that she was “very pleased with the traction they are achieving in the plan forward that will impact the customer across product, brand and experience” and walked through key elements that were described as “a mix of both strategic acceleration and disciplined expense management,” which she said has made a difference as it builds toward positive comps.

Number 1: Drive Product Leadership and Create Marketplace Differentiation
“I’ve already talked about the most impactful progress our new chief merchant, Chris Santaella and his team have made to drive near-term improvement,” Vaughn outlined. “They’ve quickly secured significantly more allocation of in-demand product to drive our back-to-school and holiday business; this includes leaning into both athletic and casual styles across a number of brands. As part of these efforts, they completed an extensive round of top-to-top meetings with our key vendor partners. These partners are aligned with Journeys’ unique team customer proposition and are excited about and supportive of our strategic direction to better serve this customer through elevated assortments and depth.”

Vaughn said Journeys would build on its footwear leadership position with key brands and work to add new brands beyond those Journeys is traditionally known for going forward.

“In conjunction with these efforts, we are deploying an in-store digital and social refresh at the end of the second quarter to build awareness around the enhanced assortment and access,” she added.

Number 2: Build a Journeys Brand and Enhance the Omni Experience
“This initiative centers around reinforcing Journeys as the destination for teen fashion footwear and Journeys as a leading retail brand,” the Genesco CEO explained. “And, to begin, we’ve updated our consumer segmentation to better market to our customers and help sharpen our Journeys brand purpose and market position. We’ve also onboarded a new creative agency, which is developing a new brand communication strategy. Digital acceleration is an important part of these efforts, including an enhanced web experience and personalized marketing to specific audiences with the new segmentation. Layering in new functionality and benefits of our All Access Loyalty program will allow us to further differentiate Journeys and incentivize customers to consolidate their purchases with us. Finally, we’re developing an updated store concept and next-generation design to better showcase our brands and enhance brand storytelling. Our plans are to roll out and begin testing in the back part of the year.”

Number 3: Leverage the Power of Our People
“We have an incredible group of store employees that sets us apart by providing excellent service as a differentiator. Putting our employees at the center of our brand is key to boosting conversion and driving success in stores,” Vaughn expressed. “To do this, we’re improving our employee training, raising the bar on our service standard, and increasing customer engagement through convenience capabilities, such as mobile point-of-sale and data-driven suggestive selling.”

Number 4: Optimize to Drive Operational and Cost Efficiencies
“These are ongoing initiatives aimed toward lowering the leverage point on our fixed cost base. They include continuing to close unproductive stores while using our customer data to drive higher sales, recapture rates online or through nearby stores and optimization projects focused on major expense items and inventory,” she explained. “Finally, across our company, we’re going deeper into CRM and customer data analytics. Accelerating these consumer insight efforts is helping us build on the early success of our loyalty and affinity programs, where we now have over 2.5 million members in the Schuh Club in its first two years, over 2.5 million members in Journeys All Access in under a year and nearly 900,000 members in J&M Insiders. In all cases, members are driving higher engagement and repeat purchase rates, which is motivating us to grow these programs further.”

Vaughn continued the conversation regarding the current state of affairs, suggesting the company was pleased that sales, gross margin and expenses exceeded expectations in the first quarter.

“After a slow start in February, we saw a nice improvement driven by the Easter holiday, the later timing of tax refunds, and the key items in our assortment that we were able to pull forward to maximize the demand during this peak period,” she outlined.

Vaughn said the company continues to “prudently manage Journeys’ inventory,” down 20 percent year-over-year at quarter-end.

“This enabled us to keep markdowns in check and deliver gross margins that were ahead of our expectations,” Vaughn said. “The savings we captured from our ongoing cost program also helped Journeys achieve an operating income close to last year’s level despite lower sales. Journeys’ digital business was also a highlight, posting double-digit growth. Consumers responded well to our recent initiatives and enhanced online assortment, improved digital marketing, loyalty perks for all access members, and the opportunity to buy online and pick up in store.”

Then Vaughn stepped the 900-pound gorilla in the room, which quickly got to the root of many of the retailer’s (and Vans’) problems.

“In Q4 last year, we experienced increased pressure on Journeys’ core product assortment, including boots and vulcanized product,” Vaughn explained. “With limited ability to adjust right away, given footwear product lead times, we expected this dynamic to continue into the front half of this year despite facing easier compares,” failing to note that the company’s largest vulcanized brand was quickly spiraling downward for a year. The Schuh division was experiencing many of the same vulcanized (or Vans?) problems and boots were a challenge for everyone in a winter season that barely arrived before the new year.

Vaughn noted that a diversified assortment across casual and fashion athletic categories that serves multiple wearing occasions resonates with Journeys customers, and they are responding to it.

“We’re excited about the opportunity to deliver newness across a number of brands, which should also drive higher ASPs,” Vaughn suggested. “This not only helped our results in Q1 but also instilled in us greater confidence in the product changes we’ve made for the second half as we have secured significantly more product allocation to drive our back-to-school and holiday business. No other retailer serves the teen customer, especially the teen girl, quite the same as Journeys with its unique proposition as the destination for teen fashion footwear across casual and athletic brands. With this strong strategic positioning, we have the backing of our consumers, who drove positive store traffic again in Q1, and the incredible support of our brand partners as we work together to drive Journeys growth.”

Journeys Group comp store sales were down 5 percent year-over-year in the first quarter, better than expected, but the decline also came on top of a 14 percent decline in Q1 last year. The stores Genesco closed last year across its portfolio had a negative 1 percent net impact on total sales, mostly from Journeys.

Total Journeys Group sales were $259.4 million in the first quarter, compared to 272.1 million in the prior-year Q1 period. Journeys represented 56.7 percent of total Genesco sales in the first quarter, a representation that was up 30 basis points year-over-year. Journeys gross margin was up 40 basis points versus last year due primarily to lower markdowns. Journeys Group’s operating loss was flat year-over-year, coming in at a loss of $18.8 million, compared to $18.4 million in the year-ago period.

Journeys Group had 1,047 stores open at quarter-end, with one new door and 17 closed doors in the quarter. Company CFO Tom George said the company continues to evaluate up to 50 potential Journeys store closures this year.

Looking ahead, management is apprehensive about getting too excited or invested in the Journeys turnaround at this juncture, considering product lead times and the work that needs to be accomplished. Vaughn said she expects the top line to remain under pressure in the second quarter. “We continue to expect the back half to be stronger as fresh receipts begin to hit Journey stores later this quarter and our product repositioning is more thoroughly reflected. Thinking about the cadence of the year, keep in mind the first half consists of our two lowest volume quarters, where sales deleverage and our fixed expense base tends to be magnified,” she said.

“While we are optimistic about the new product receipts that will hit Journeys stores towards the end of the quarter, ongoing declines in the vulcanized category continue to pressure our top line in Q2,” George noted. “We think it’s appropriate to be more cautious with the second quarter, given the pressures we’re seeing with the vulcanized business on Journeys and some of the pressures we’re seeing in the Schuh business and the Johnston & Murphy business.”

George said that in the back half with Journeys, the company felt that the third quarter could still see some challenges.

.“Again, it’s a little bit of a leaky bucket kind of concept that the vulcanized will be under pressure, but we feel we’ve got a substantial amount of new relevant product coming in to be able to mitigate that, but we are taking a cautious view on the comp there and hoping to get to a positive comp in the third quarter, but that could be challenging. But the fourth quarter, we do feel that we’re going to have a positive comp, albeit small in the fourth quarter,” the CFO cautioned.

“Once sales growth returns, this works to our advantage, providing significant leverage and earnings upside,” Vaughn added. “In the meantime, we’re maintaining our full-year guidance. As Journey’s product advances and our other strategic initiatives across the business take hold, we expect momentum to build from there into fiscal 2026.”

Image courtesy Journey’s


See below for additional SGB Media coverage of Genesco’s fiscal first quarter, including details about the Schuh Group and Johnston & Murphy Group businesses:

Genesco, Inc. Sees Journeys Slide Continue in Q1 as Schuh and J&M Turn Negative