Retail footwear veteran Genesco Inc. is shuttering more than two dozen underperforming stores as part of a broader push to reduce its physical footprint, cut overhead and boost overall profitability.

The Nashville-based parent company of Journeys, Johnston & Murphy and U.K.-based Schuh closed 25 retail stores during its second quarter of fiscal 2027. 

With three new openings, the net reduction brought its total store fleet down to 1,186 – a 5% drop in total retail space from the same period last year. The quarterly cuts were led by teen retailer Journeys, Schuh and Johnston & Murphy, with 17, six and two closures, respectively. 

Genesco says its reduced square footage is part of a deliberate operational pivot. Net sales dropped 3% to $530 million, but management cited store closures, reduced promotional discounting and license transitions as intentional moves that sacrificed top-line revenue to secure healthier margins.

The lower store count and a disciplined pull-back on price cuts helped adjusted gross margins expand 140 basis points to 47.2%.

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

With strong back-to-school demand lifting Journeys’ sales to mid-single-digit growth in August, Genesco raised its full-year adjusted earnings guidance to the high end of its $2 to $2.40 per share range. For investors, the company’s 25 store closures represent a tactical trim, exchanging sheer size for a leaner, higher-margin operation.