ROTH investor conference is Sunday - Wednesday. Implications of a new tax on some high net-wealth individuals from Moss Adams Capital. "The Legacy of Bing," next up at SHACC. Details on Industry Insight.
I am catching up on the recent Genesco second quarter earnings conference call which had several interesting skate shoe references.
Genesco owns the 815-plus store Journeys chain, the largest customer for many skate brands.
Journeys has been gone deep in skate for a while and has been successful with it.
Here are some comments from Genesco CEO Robert Dennis on skate and business trends in general at Journeys. I copied the comments from a transcript of the conference call.
"We experienced softness in many of our key product categories during the quarter with the exception of canvas and women's fashion, which continue to perform very well. We were also pleased to generate another increase in (average selling price) to approximately $48 in the quarter, primarily driven by women's fashion, canvas and core skate. In total, athletic was up slightly as a percent of overall sales."
"We believe that Journeys heads into back-to-school with a compelling merchandise position based on our strong assortment and depth in canvas and core skate. However, a few vendors within these categories are becoming more widely distributed and as a result, we have adopted a somewhat more promotional posture. As we mentioned on our last call, our vendors have
done a good job of staying fresh with existing trends, but no real breakout of new fashions has occurred. Of course, we continue to test different possibilities, but we have not yet seen signs of the sort of fresh and compelling fashion change that provide a meaningful spark for incremental demand."
Here, Dennis responded to a question asking if skate is being over distributed and the impact of PacSun adding more footwear.
"Well, I don't think I said that skate was widely distributed. I just called out a couple of vendors that have broadened their distribution. Did not single out skate. We have heard the reports that the skate business is off. Our athletic business at Journeys is up as a percent to total. There have been shifts within that mix, as there always are and that is pretty much all we are going to say about that. ...
"On PacSun, we see what they have said. They plan to operate -- what they've said is they plan to operate differently with a more edited and impactful assortment, which sounds like they want to cherry pick top-selling products from each important line. We will see if footwear vendors will be interested in that. Obviously, we think it undermines the efforts of chains that are fully
committed to the major footwear brands."
"What we have seen is a very promotional mall and our team looked at that situation at comps and at inventory position and made the judgment call that they needed to ramp up year-over-year the amount of promotion that we did in the store just to stay -- to get to the level of inventory liquidation we needed.
"So we are thinking that that is just a back-to-school event and we don't anticipate maintaining that posture. As you know, we really pride ourselves on being a full-price retailer and so we really -- internally, we resist doing something that is more storewide as we did and we expect to get back to our old promotional posture and hopefully stay there."
"For the Journeys group, same-store sales declined 9% for the quarter compared to a 2% gain for the same period last year.
"Through August 24, comps for the month in the Journeys group were minus 3% against plus 9% in last year's comparable period.
"Inventories for the Journeys group ended up less than 1% compared to last year."