Business Wire | Jul 1, 2021 09:40AM EDT

Legion Partners' Four Highly-Qualified Director Candidates Issue Letter to Genesco Shareholders

Jul. 01, 2021

LOS ANGELES--(BUSINESS WIRE)--Jul. 01, 2021--Legion Partners Asset Management, LLC (together with its affiliates, "Legion Partners" or "we"), which collectively with the other participants in its solicitation beneficially owns approximately 5.9% of the outstanding common shares of Genesco, Inc. (NYSE: GCO) ("Genesco" or the "Company"), today announced that its four highly-qualified and independent director candidates - Marjorie L. Bowen, Margenett Moore-Roberts, Dawn H. Robertson and Hobart P. Sichel - have issued a letter to shareholders regarding their value-enhancing vision. Learn more about our four world-class nominees and how to vote on the WHITE proxy card by visiting www.GCOForward.com.

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June 30, 2021

Dear Shareholder,

Legion Partners Asset Management, LLC (together with its affiliates, "Legion Partners" or "we") is seeking to elect the four of us to Genesco, Inc.'s ("Genesco" or the "Company") nine-member Board of Directors (the "Board") at the Company's Annual Meeting of Shareholders (the "Annual Meeting") on July 20, 2021. We take our prospective roles as directors extremely seriously and are committed to representing the interests of all shareholders.

Each of us agreed to be nominated by Legion Partners earlier this year because we believe Genesco's best days should still be ahead of it. Although the Company has spent many years stagnating and underperforming relative to its peers and relevant indices, we believe that there are an array of issues that can be fixed by an engaged, objective and properly refreshed Board. These issues include:

* A Value-Destructive Conglomerate Structure * Poor Capital Allocation and Strategic Oversight * Excessive Interlocks Among Directors and Insiders * Bloated Cost Structure and Sustained Margin Erosion * A Lack of Focus on Operational Excellence at Journeys * Misaligned Executive Compensation

We believe that a Board comprised of impartial individuals with fresh views and the right skills and experience can quickly identify actionable solutions. This is the type of Board that Genesco will have if shareholders elect us. Collectively, we possess extensive corporate governance acumen, capital markets expertise, retail operations experience, e-commerce and digital know-how, and strategic turnaround backgrounds. We also have a deep and practical understanding of best practices for driving growth while implementing environmental, social and governance ("ESG") and Diversity, Equity and Inclusion ("DEI") initiatives.

In addition to being able to help fix problems, we also know how to help businesses adapt as consumer tastes continue to change and more shopping occurs in the extremely competitive online environment. We cannot stress enough how pivotal it is for Genesco to reassess its approach and strategy as the pandemic fades, stimulus subsides and competitors fight harder to establish lasting bonds with younger consumers and their parents across all channels, including social media and apps. The Company's directors need to maintain a sense of urgency in order to spot the "big picture" shifts and opportunities that will impact the Company today and moving forward.

Against the backdrop of Genesco's evolving operating landscape, we contend that we are the right directors at the right point in time. We are completely committed to working collaboratively with the remaining incumbents to move the Company into the modern era when it comes to customer engagement, operations, governance, and merchandising and marketing. We have what it takes to achieve near-term business efficiencies while overseeing the pursuit of long-term growth and deeper consumer engagement.

Nominee Skills Sample of Relevant Experience

* Capital Markets * When Ms. Bowen was a Genesco director in Expertise 2018, she applied her capital markets * Corporate background and transaction experience to Governance the Company's strategic alternatives Acumen process - which resulted in the sale ofMarjorie * Certified the non-synergistic Lids business andBowen Financial provided a runway for value-enhancing Expert share repurchases * Turnaround * Her experience would be invaluable if the Experience Board were to impartially consider ways to * Transaction refine the Company's costly and cumbersome Evaluation conglomerate model Know-how

* Customer * When Ms. Moore-Roberts served as Vice Experience President and Global Head of Inclusive Acumen Diversity at Yahoo!, she established the * ESG Expertise company's first Office of InclusiveMargenett * DEI Diversity and a global Center ofMoore-Roberts Specialization Excellence * Digital Media * She oversaw the implementation of a number Know-how of policies and procedures that filtered * Marketing into business lines and operations during Experience a period of strong top-line growth at Yahoo!

* Customer Experience Acumen * When Ms. Robertson was President of * Merchandising Macys.com, she led the development, launch Expertise and growth of its e-commerce salesDawn * Marketing * As President of Old Navy, she droveRobertson Background significant sales and improved EBITDA, * E-Commerce including strong e-commerce performance Specialization * This is exactly the type of experience * Retail Genesco's brands need given the large Operations and younger customer shift to digital Turnaround Know-how



* Marketing * Mr. Sichel previously worked at Burlington Expertise Stores from 2011 to 2019, where he served * E-Commerce as Executive Vice President and Chief Specialization Marketing OfficerHobart P. * Turnaround * He was a key member of the leadership teamSichel Experience that turned the business around and * Retail ignited sales growth prior to an initial Operations public offering Know-how * He has the ideal background for helping * Capital Genesco identify efficiencies while still Markets Acumen pursuing growth - especially e-commerce growth - during a transformation period

When it comes to specific actions and ideas, we are cognizant of the fact that our slate would only represent a minority of Genesco's nine-member Board. We are also aware that none of us has access to the Company's non-public information. This has not stopped us, however, from analyzing the business from the outside and setting a vision for value creation: we want to help create a simpler, modernized and operationally-efficient Genesco that can deliver enhanced value for shareholders, delight customers and drive lifetime value, and provide rewarding opportunities to a diverse group of employees.

We see a clear path to realizing this vision:

* Refocus the Company and Transform its Culture Conduct a strategic review and identify options for divesting of non-core, non-synergistic businesses Realign executive compensation, including performance-based equity vesting, to tangible key performance indicators and value creation metrics Initiate a culture assessment in order to establish a more innovative, vibrant and accountable work environment up and down the organization Develop tangible public plans and goals for both ESG and DEI, which will be increasingly important as Journeys competes for a younger, more socially-engaged consumer Task the management team with preparing a growth-focused strategy for the core Journeys business, with a specific emphasis on penetrating high-growth consumer categories and upgrading digital and e-commerce capabilities We believe these steps can yield annual savings of $20 million to $30 million, with non- business divestitures potentially producing approximately $350 million(1) * Reshape the Company's Cost Structure and Increase Capital Efficiency Assess paths to improving inventory turns Implement cost reduction priorities for corporate sales and general and administrative expenses, which appear bloated Analyze potential sale-leaseback transactions to unlock material value trapped in real estate Evaluate sustainability and supply chain practices to remedy financial and environmental inefficiencies, including split shipments We believe these steps can help grow Journeys' segment EBITDA margin by 2%, resulting in an increase from 8% to 10%(2) * Reignite Growth by Positioning Journeys as a Strategic Retail Partner and the Preferred Consumer Destination for Footwear Identify customer and brand partner value propositions to deepen relationships Increase share of wallet with improved product offerings and basic offerings like buy online pick-up in store, curbside pickup, and same-day delivery, etc. Enhance customer engagement by implementing a loyalty program, building a mobile app, and improving the website Drive new customer acquisition via improved digital marketing and social engagement We believe these steps could help grow sales by 4%-6% annually(3) Our ideas, if implemented, could lead to annual earnings of $13 per share, which is a substantial increase from the $5 per share of earnings that Genesco achieved pre-pandemic.(4)

We recognize that in order for ideas to turn into actions, there will need to be collegial deliberation of fresh and varying perspectives in the boardroom. That is what we hope to facilitate if we are fortunate enough to be elected to the Board at this year's Annual Meeting.

While we are independent of Legion Partners, we do share the firm's view that there is a roadmap to achieving superior value creation for all of Genesco's stakeholders. The changing dynamics in the retail and footwear industries make this the right time to build and execute that type of roadmap at Genesco. We encourage you to vote on the WHITE proxy card to elect our slate and give us the opportunity to champion your interests in the boardroom.

Thank you for evaluating our experience and ideas.

Sincerely,

Marjorie L. Bowen Margenett Moore-Roberts Dawn H. Robertson Hobart P. Sichel

Please visit www.GCOForward.com to view important materials.

If you have any questions or require assistance as you consider how to vote, please contact Legion Partners' proxy solicitor Kingsdale Advisors at GCO@kingsdaleadvisors.com.

VOTE ON LEGION PARTNERS' WHITE PROXY CARD

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About Legion Partners

Legion Partners is a value-oriented investment manager based in Los Angeles, with a satellite office in Sacramento, California. Legion Partners seeks to invest in high-quality businesses that are temporarily trading at a discount, utilizing deep fundamental research and long-term shareholder engagement. Legion Partners manages a concentrated portfolio of North American small-cap equities on behalf of some of the world's largest institutional and high-net-worth investors. Learn more at www.LegionPartners.com.

Annual savings projections based on (i) $15 million in annual corporate costs reduction, which assumes corporate spending as % of net sales returning to 1.1% from the pre-COVID 1.8% and (ii) $8-10 million annual store rent savings, which assumes 20% of leases renewal and 20% reduction(1) in renewed leases. Non-core asset sale assumes $282mm in total proceeds from the divestiture of Schuh and J&M based on multiples to Adj. EBITDA of 4x and 10x, respectively. $141mm of real estate value realized through outright sales and sale-leaseback transactions based on implied $105 per sq. ft on average.

Journeys' margin expansion assumes 100bps expansion vs FY 2020 (pre-COVID(2) level) and also incorporates $40mm of cash free up assuming Journeys inventory turns improvement of 0.5x.

(3) Journeys' sales growth assumes 5% annual growth for 3 years vs. FY 2020 level.

$13 EPS incorporates the following assumptions. Sale-leaseback assumes $87mm of share buyback at share price of $65. Buyback with excess cash(4) assumes $164mm of share buyback at share price of $70, allowing the Company to have $50mm of net cash on balance sheet. Non-core asset sale assumes $282mm of share buyback at share price of $75 to $90. All non-reported EPS calculations assume a tax rate of 25%.

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CONTACT: For Investors: Kingsdale Advisors Michael Fein / Lydia Mulyk, 646-651-1640 mfein@kingsdaleadvisors.com / lmulyk@kingsdaleadvisors.com

CONTACT: For Media: MKA Charlotte Kiaie / Bela Kirpalani, +1 646-386-0091 ckiaie@mkacomms.com / bkirpalani@mkacomms.com