The corporate parent of Lids Sports Group said Thursday that it is still optimistic a buyer can be found for the struggling Zionsville-based headwear retailer while acknowledging that the process has taken longer than expected.
Nashville, Tennessee-based retail conglomerate Genesco Inc. announced in February that it planned to sell Lids, whose sales performance has been on the decline in recent quarters.
To date, Genesco has not announced any deals, adding to uncertainty about its future.
“We are still working diligently and believe we still have a reasonable prospect of accomplishing a sale,” Genesco Chairman, President and CEO Robert Dennis said Thursday morning during an earnings call with analysts. “If we ultimately determine we are not able to complete a sale on acceptable terms, we will announce that decision. We do remain convinced of the potential of the core of the Lds business, and therefore, in the event we don’t sell, we will be immediately focused on the plan to realize that potential and significantly enhance profitability of the business.”
Genesco’s other business units are footwear-focused, including the youth-oriented Journeys Group, men’s clothing and shoe retailer Johnston & Murphy Group and Europe-based footwear retailer Schuh Group. About three-fourths of Genesco’s revenue comes from shoe sales.
Lids is the second-largest of Genesco’s holdings, bringing in about a quarter of the company’s total revenue, but the retailer is struggling.
Genesco reported a third quarter profit of $14.4 million, or 74 cents per share while Lids posted an operating loss of $388,000.
For the third quarter, Lids’ comparable sales dropped 2 percent while Genesco's comparable sales rose 4 percent. Comparable sales, an important retail metric, includes sales from both physical stores and websites that have been in operation for more than a year.
Year to date, over three quarters, Genesco has turned in a profit of $12 million while Lids took an operating loss of $4.6 million.
As of Nov. 3, Lids operated 1,116 stores, including 119 Locker Room by Lids locations in Macy’s department stores. The store count is down 10 percent from January 2017.