Genesco embarks on AI-driven transformation strategy, jobs losses expected

Wholesale and licensing firm Genesco has announced the launch of a strategic transformation following a review of the business, as pressure on profitability mounts. The plan will see the US company adopt a new operating model, which will roll out in phases.

As a result of the process, some positions are expected to be impacted within the IT department, a press release revealed. “The company is committed to supporting affected team members through the transition,” it was stated.

New business model will impact IT department

Much of the plan zones in on a shift towards a new business model, through which Genesco intends to accelerate AI innovation, improve scalability, and align technology capabilities with business priorities.

The move will be driven by a partnership with an undisclosed global technology provider, with which Genesco plans to adopt new tools and technologies, all with the goal of uplift its long-term growth strategy.

In a statement, board chair, president and CEO, Mimi E. Vaughn, said the strategy intends to evolve the company’s IT operating model to further strengthen capabilities, expertise, scale and efficiency.

Vaughn continued: “This transformation builds on the meaningful investments and progress we have made in digital and omnichannel and enables us to more effectively leverage advanced technologies.

“By aligning our resources to a next-generation model, we are enhancing our ability to serve customers, increasing speed and flexibility across the organisation, and supporting the company’s continued growth.”

Fluctuating financial pressure mounts

The news comes amid fluctuating financial pressures for the group, which saw its stock plunge nearly 30 percent after its Q3 fiscal 2026 results missed analyst expectations and led to the company lowering its full-year guidance.

A key concern is that of gross margins, which have been impacted by tariffs and the exit of certain licenses. In the first and second quarter of FY26, Genesco also reported an adjusted operating loss, declining on income in the previous year.

The holiday period proved more promising, however. For the fourth quarter-to-date, ended December 27, 2025, Genesco saw comparable sales increase 9 percent, driven by strong performance among Journeys Group. The company then raised its full-year adjusted earnings per share outlook to “at least 1.30 dollars a share”, indicating a stronger end to the financial year.

Genesco currently owns and operates several footwear brands, such as Journeys, Schuh, and Little Burgundy, as well as managing the licenses of brands like Wrangler, Dockers, and Starter.