Genesco Closes 25 Stores To Boost Profits Amid Sales Decline

American retailer Genesco Inc. is shutting down more than two dozen struggling locations in a calculated effort to shrink its physical footprint and lift profits. The Nashville-based parent company owns Journeys, Johnston & Murphy, and the U.K.-based chain Schuh. During its second quarter of fiscal 2027, the firm closed exactly 25 stores.

This move included three new openings, bringing the total store fleet down to 1,186 shops. That represents a 5% drop in retail space compared with the same period last year. The quarterly cuts were led by teen retailer Journeys, which shuttered 17 locations. Schuh closed six stores and Johnston & Murphy closed two.

Genesco states this reduction in square footage is a deliberate operational pivot. Net sales fell 3% to $530 million, but management argued these closures, along with reduced promotional discounting and license transitions, were intentional choices that sacrificed top-line revenue to secure healthier margins. The lower store count and disciplined pull-back on price cuts helped adjusted gross margins expand by 140 basis points to reach 47.2%.

Flagship brand Journeys posted a 2% gain in comparable sales, marking its eighth consecutive quarter of growth. Johnston & Murphy comparable sales grew 4%. Genesco also significantly cleaned up its balance sheet, slashing total debt from $71 million a year ago down to $15.8 million.

Beyond shutting doors, the retailer is aggressively targeting operational costs. A company-wide efficiency push fueled by store remodeling, automation, and AI integration is projected to save between $40 million and $50 million through fiscal 2029.

Strong back-to-school demand lifted Journeys' sales in August. This activity pushed growth to mid-single-digit figures for the month. Genesco raised its full-year adjusted earnings guidance to the high end of its range, which sits between $2 and $2.40 per share. For investors, these 25 store closures represent a tactical trim that exchanges sheer size for a leaner, higher-margin operation.