The Tennessee-based parent company of Lids Sports Group is attempting to sell the headwear and team athletics retailer that is headquartered in Zionsville. Genesco Inc. (NYSE: GCO) says it’s part of an effort to focus on its footwear business, which includes Journeys locations in the United States and Schuh stores in the United Kingdom. The company says a strategic review process has found the move would create "the optimal platform to deliver enhanced shareholder value over the long term."
Wall Street advisor PJ SOLOMON has been hired to help guide the process and Genesco has appointed a four-member special committee to oversee the proposed sale.
In a news release, special committee chairman James Bradford said "the steps announced today reflect the results of an examination by Genesco’s board and management of strategic alternatives with the intent to enhance shareholder value. The Lids Sports Group has been an important part of Genesco, and we still see significant potential for the business. We believe, however, that it is in the best long-term interests of the Company and its shareholders to focus on building upon our core footwear platform, in which the businesses share common strategic characteristics and where we believe we can generate greater operating efficiencies and synergies. Additionally, we believe Lids Sports Group is undervalued as part of Genesco and that its sale would generate capital that the Company can deploy productively to further enhance shareholder value."
In late-2016, Lids Sports Group relocated from Indianapolis to a new, more than $20 million headquarters in Boone County. The expansion plans were announced in 2014 and included adding up to 758 jobs over the course of a decade. Genesco acquired Hat World Inc., which currently operates branded stores including Lids, Locker Room by Lids and Lids Clubhouse, in 2004. Hat World first launched in Lafayette in 1995. Its portfolio was slimmed down in January 2016 with the sale of Lids Team Sports to a Texas company for an undisclosed sum.
Genesco says it does not plan to make additional details of the process public "unless or until a definitive transaction agreement is reached or until the board determines to conclude the process." Genesco’s footprint includes a presence in more than 2,725 retail stores and leased departments in the U.S., Canada, the U.K., Ireland and Germany.