Aldo sells Little Burgundy unit to Genesco

Aldo Group is selling off its Little Burgundy banner to U.S. giant retailer Genesco Inc., which operates Journeys, among other banners.

The 37-store multi-brand division of privately held Aldo caters to a clientele age 18 to 34 with a selection of urban fashion brands like Converse, Vans, Toms and Nike.

Terms of the deal and expected date of closing for the sale were not disclosed. The transaction is subject to customary closing conditions.

All 17 Little Burgundy head office employees and 450 store staff will become Genesco employees when the deal closes, Geneviève Sharp, Aldo Group’s senior PR manager, wrote in an email. There have been no job losses, she added.

An announcement from Genesco said Margaret Thouez will continue in her role as senior vice-president and general merchandise manager of Little Burgundy.

Aldo will remain with three divisions: its namesake Aldo and Call It Spring with signature brands, and Globo, a multi-brand concept. The company, founded in 1972 by Aldo Bensadoun, is a global leader in footwear, with 2,300 points of sale in 95 countries.

“The retail industry is changing dramatically.” Sharp wrote. “We need to better focus on our core business and foster the growth of our Aldo and Call It Spring brands globally through all channels.”

Little Burgundy, named for the Montreal neighbourhood, has launched collaborations with Frank & Oak as well as other Montreal brands.

“Little Burgundy will keep its name and unique existing DNA,” Sharp wrote.

The deal gives Genesco, with a market value of about $1.5 billion US on the New York Stock Exchange, a footprint from which to expand in Canada. It currently operates about 2,800 stores in the U.S., Canada, United Kingdom, Ireland and Germany, under multiple banners, including Journeys, Schuh and Lids.

“In addition to giving us access to a broader customer base than we are currently targeting in Canada, and one that is being well served by Little Burgundy in stores and online, the acquisition will add scale to our existing Canadian omnichannel operations,” Genesco chairman, president and CEO Robert J. Dennis said in a statement.

Because Aldo is a major international player, it has to find brands that function not just in Canada, said Maureen Atkinson, an analyst with J.C. Williams Group in Toronto. “They try things out and if they don’t work, they edit them out,” he said, pointing out that Stoneridge, an outdoorsy banner, transformed to Little Burgundy in 2008.

“Genesco has multi-brand stores, so it’s their kind of business,” Atkinson added. It benefits by gaining good real estate in Canada, but it’s not a huge, overwhelming acquisition like Target, she said.

“It probably makes a lot of sense,” Atkinson said.