Legion Partners and 4010 Partners call on Genesco to consider 'dramatic change'
Legion Partners, LLC and 4010 Partners, LP released a letter calling on the Board of Directors of Genesco, Inc to implement a series of immediate reforms and explore strategic alternatives. Together, Legion and 4010 own more than 5% of the specialty retailer's outstanding shares. The activist investors claim Genesco - whose brands include Johnston & Murphy, Lids, Schuh and Journeys - underperform its peer group and that "good-faith efforts to work constructively with the company to find a better solution for shareholders have not been taken seriously." "Dramatic change is required at Genesco," said Legion Managing Director Christopher S. Kiper. "Genesco's return on invested capital has declined from 15% in FY2013 to 6% in the most recent 12-month period. Despite the precipitous deterioration in returns and underperformance of the company's stock price, we have seen little willingness to re-think the status quo under current leadership." Specifically, Legion and 4010 believe the Genesco board should: 1) Expand its strategic review to complete an objective evaluation of all strategic alternatives; 2) Perform a comprehensive operational review; 3)Reform its corporate governance and implement changes to long-term incentive plans to better align management with shareholders.