US-based shoe and hat business Genesco has made a British acquisition with the purchase of Schuh, in a deal which provides hope for UK retailers.
US-based shoe and hat business Genesco has made a British acquisition with the purchase of Schuh, in a deal which provides hope for UK retailers.
The £100 million deal has the potential to rise by £25 million in the form of a cash bonus to be paid in 2015, subject to Scottish-based Schuh achieving specific performance targets.
Under the terms of the deal the employees of Schuh who have worked for the company for more than three months, 2,310, are to share a £37.3 million payout resulting in average payments of £16,100.
Managing director of Schuh, Colin Temple, says that the business has gained a market share in recent years through strong product assortment and a growing store base.
He adds: ‘We specialise in providing our customers with branded casual and athletic footwear styles that are in line with current fashion trends.’
Temple believes the combination with Genesco will help to accelerate future growth plans.
Headquartered in Livingston, Scotland, Schuh has 59 stores in the UK and the Republic of Ireland.
For the year ending 27 March 2011 Schuh generated net sales of £164 million.
According to a statement, the purchase agreement provides for deferred purchase price payments totaling £25 million, to be paid in slices of £15 million and £10 million on the third and fourth anniversaries of the closing of the deal.
Temple and finance director Mark Crutchley are to receive the £25 million bonus.
Chief executive officer of Genesco, Robert Dennis, comments: ‘Schuh provides us with an immediate and established retail presence in the United Kingdom, a highly experienced international management team, and improved insight into global fashion trends.’
Dennis explains that the concept of Schuh is similar to the Journeys business that Genesco owns.
‘We believe that the combined business will benefit from significant merchandising synergies and from many opportunities to share best practices to our mutual benefit,’ he says.
