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EXHIBIT 99.1
FINANCIAL CONTACT: JAMES S. GULMI (615) 367-8325
MEDIA CONTACT: CLAIRE S. MCCALL (615) 367-8283
GENESCO, NAUTICA APPAREL TO END FOOTWEAR LICENSE
-- GENESCO REAFFIRMS EARNINGS EXPECTATIONS BEFORE
NAUTICA CLOSEDOWN CHARGES --
NASHVILLE, Tenn., Jan. 29, 2001 ---- Genesco Inc. (NYSE: GCO) announced today
that it has entered into an agreement with Nautica Apparel, Inc. to end its
license to market footwear under the Nautica label, effective January 31, 2001.
The agreement grants Genesco the exclusive right to sell Nautica-branded
footwear for six months following the termination, to fill existing customer
orders and to sell existing inventory.
Genesco said it expects its operating results for the fourth quarter
ending February 3, 2001, to reflect aggregate one-time charges and provisions in
the range of $2.3 million to $3.0 million after taxes ($0.08 to $0.11 per
diluted share), including contractual payments to Nautica Apparel for the
license cancellation and other charges in connection with the winding up of the
Nautica footwear business.
Ben T. Harris, Chairman and Chief Executive Officer of Genesco, said,
"This step will enable us to redirect both the human and financial resources
devoted to this business into areas where we see more potential to deliver on
our internal benchmarks for sales and earnings growth and EVA improvement."
The Company also said that it was again confirming its expectation to
meet or exceed its previous forecast of earnings before discontinued operations
of at least $0.53 per diluted share for the quarter and $1.39 for the full year
before the charges associated with the Nautica license cancellation. The Company
expects to report fourth-quarter and year-end results on March 7, 2001.
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GENESCO --- ADD ONE
Following the body of this release is a table containing historical
information on the net sales and operating earnings of the Nautica Footwear
business for the first three quarters of Genesco's fiscal year ending February
3, 2001, and for the previous fiscal year. The Company expects Nautica footwear
sales for the fourth quarter ending February 3, 2001 to be in the range of $3.0
million to $3.5 million, and sees operating losses for the Nautica Footwear
business of approximately $450,000 to $850,000 for the quarter, before the
charges related to the license termination. The operating results of the Nautica
Footwear business during the fourth quarter and for the six month selloff period
extending through the Company's second quarter of Fiscal Year 2002 will continue
to be reflected in the reported results of the Company's Licensed Brands segment
(comprised of the Nautica Footwear and the Dockers Footwear operations). The
Company currently expects the operating earnings of that segment to be
negatively affected by Nautica Footwear losses in the range of $1 million to
$1.8 million on expected Nautica sales of $6.5 million to $8.0 million for the
first half of Fiscal 2002, and does not presently foresee material costs
associated with Nautica Footwear after that time.
Certain statements in this release, including the second, third and
fourth paragraphs and the non-historical information in the fifth paragraph are
forward-looking statements. They are consequently subject to a number of risks
and uncertainties. Actual results could turn out to be materially different
because of unexpected factors, including revisions to estimates of the known
costs or the incurrence of unforeseen costs associated with exiting the Nautica
business, the risk that Nautica inventory does not sell or is returned by
customers, or that customers will cancel orders or negotiate higher discounts
and allowances than the Company anticipates with regard to Nautica inventory.
Other factors that could result in differences include changes in consumer
buying patterns or other factors including winter weather affecting demand for
the Company's goods,
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GENESCO --- ADD TWO
deterioration in the business or financial position of the Company's wholesale
customers, disruptions in product supply or distribution, year-end audit
adjustments and the outcome of litigation and environmental matters affecting
the Company. Forward-looking statements reflect the expectations of Genesco's
management as of the date they are made. Genesco disclaims any obligation to
update such statements.
Genesco, based in Nashville, sells footwear and accessories in 759
retail stores in the U.S., principally under the names Journeys, Johnston &
Murphy, Jarman and Underground Station, and on internet websites
www.journeys.com and www.johnstonmurphy.com. The Company also sells footwear at
wholesale under its Johnston & Murphy brand and under the licensed Dockers
brand. Additional information on Genesco and its operating divisions may be
accessed at its website www.genesco.com.
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NAUTICA FOOTWEAR
CONSOLIDATED EARNINGS SUMMARY
IN THOUSANDS
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FY 00 (YEAR ENDED JAN. 29, 2000) Q1 Q2 Q3 Q4 TOTAL
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SALES 10,580 7,307 6,045 4,482 28,414
OPERATING INCOME 691 (332) (645) (1,870) (2,156)
FY 01 (YEAR ENDING FEB. 3, 2001) Q1 Q2 Q3
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SALES 7,770 3,826 4,018
OPERATING INCOME (432) (772) (989)
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