Forward Looking Statements
This discussion and the notes to the Condensed Consolidated Financial Statements include certain forward-looking statements, including those regarding the performance outlook for the Company and its individual businesses and all other statements not addressing solely historical facts or present conditions. Actual results could differ materially from those reflected by the forward-looking statements in this discussion, in the notes to the Condensed Consolidated Financial Statements, and in other disclosures, including those regarding the Company's performance outlook for Fiscal 2013 and beyond.

A number of factors may adversely affect the outlook reflected in forward looking statements and the Company's future results, liquidity, capital resources or prospects. These factors (some of which are beyond the Company's control) include:

• Adjustments to estimates reflected in forward-looking statements, including the amount of required accruals related to the contingent bonus potentially payable to Schuh management in three years based on the achievement of certain performance objectives.

• The costs of responding to and liability in connection with the network intrusion described under "Significant Developments-Network Intrusion" including any claims or litigation resulting therefrom.

• The timing and amount of non-cash asset impairments.

• Weakness in the consumer economy.

• Competition in the Company's markets.

• Inability of customers to obtain credit.

• Fashion trends that affect the sales or product margins of the Company's retail product offerings.

• Changes in buying patterns by significant wholesale customers.

• Bankruptcies or deterioration in the financial condition of significant wholesale customers, limiting their ability to buy or pay for merchandise offered by the Company.

• Disruptions in product supply or distribution.

• Unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs and other factors affecting the cost of products and operating results.

• The Company's ability to continue to complete and integrate acquisitions, expand its business and diversify its product base.

• Changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons.

• The Company's ability to build, open, staff and support additional retail stores and to renew leases in existing stores and maintain reductions in occupancy costs achieved in recent lease negotiations, and to conduct required remodeling or refurbishment on schedule and at expected expense levels.

• Deterioration in the performance of individual businesses or of the Company's market value relative to its book value, resulting in impairments of fixed assets or intangible assets or other adverse financial consequences.

• Unexpected changes to the market for the Company's shares.

• Variations from expected pension-related charges caused by conditions in the financial markets.

• The outcome of litigation, investigations and environmental matters involving the Company, including but not limited to the matters discussed in Note 8 to the Condensed Consolidated Financial Statements.

Overview
Description of Business
The Company's business includes the design and sourcing, marketing and distribution of footwear and accessories through retail stores, including Journeys®, Journeys Kidz®, Shi by Journeys®, Underground by Journeys® and Johnston & Murphy® in the U.S., Puerto Rico and Canada and through Schuh® stores in the United Kingdom and the Republic of Ireland, and through e-commerce websites, and at wholesale, primarily under the Company's Johnston & Murphy® brand, Dockers® brand, SureGrip® brand and other brands that the Company licenses for men's footwear. The Company's wholesale footwear brands are distributed to more than 1,000 retail accounts in the United States, including a number of leading department, discount, and specialty stores. The Company's business also includes Lids Sports, which operates (i) headwear and accessory stores under the Lids® name and other names in the U.S., Puerto Rico and Canada,
(ii) the Lids Locker Room business, consisting of sports-oriented fan shops featuring a broad array of licensed merchandise such as apparel, hats and accessories, sports decor and novelty products, (iii) the Lids Clubhouse business, consisting of single team fan shops, (iv) e-commerce business and (v) an athletic team dealer business operating as Lids Team Sports. Including both the footwear businesses and the Lids Sports business, at July 28, 2012, the Company operated 2,404 retail stores in the U.S., Puerto Rico, Canada, the United Kingdom and the Republic of Ireland.

During the six months ended July 28, 2012, the Company operated five reportable business segments (not including corporate): (i) Journeys Group, comprised of the Journeys, Journeys Kidz, Shi by Journeys and Underground by Journeys retail footwear chains, catalog and e-commerce operations; (ii) Schuh Group, acquired in June 2011, comprised of the Schuh retail footwear chain and e-commerce operations; (iii) Lids Sports Group, comprised as described in the preceding paragraph; (iv) Johnston & Murphy Group, comprised of Johnston & Murphy retail operations, catalog and e-commerce operations and wholesale distribution; and
(v) Licensed Brands, comprised of Dockers® Footwear, sourced and marketed under a license from Levi Strauss & Company, SureGrip® Footwear and other brands.

The Journeys retail footwear stores sell footwear and accessories primarily for 13 to 22 year old men and women. The stores average approximately 1,950 square feet. The Journeys Kidz retail footwear stores sell footwear primarily for younger children, ages five to 12. These stores average approximately 1,425 square feet. Shi by Journeys retail footwear stores sell footwear and accessories to fashion-conscious women in their early 20's to mid 30's. These stores average approximately 2,125 square feet. The Underground by Journeys retail footwear stores sell footwear and accessories primarily for men and women in the 20 to 35 age group. These stores average approximately 1,825 square feet. The Journeys Group stores are primarily in malls and factory outlet centers throughout the United States, Puerto Rico and Canada. Journeys also sells footwear and accessories through direct-to-consumer catalog and e-commerce operations.

The Schuh retail footwear stores sell a broad range of branded casual and athletic footwear along with a meaningful private label offering primarily for 15 to 30 year old men and women. The stores, which average approximately 4,525 square feet, include both street-level and mall locations in the United Kingdom and the Republic of Ireland. The Schuh Group also operates 14 footwear concessions in Republic apparel stores in the United Kingdom averaging approximately 1,200 square feet, and sells footwear through e-commerce operations.

The Lids Sports Group includes stores and kiosks, primarily under the Lids banner, that sell licensed and branded headwear to men and women primarily in the early-teens to mid-20's age group. The Lids store locations average approximately 850 square feet and are primarily in malls, airports, street-level stores and

factory outlet centers throughout the United States, Puerto Rico and Canada. The Lids Sports Group also operates Lids Locker Room and Lids Clubhouse stores under a number of trade names, selling licensed sports headwear, apparel and accessories to sports fans of all ages in locations averaging approximately 3,000 square feet in malls and other locations primarily in the United States. The Lids Sports Group also sells headwear and accessories through e-commerce operations. In addition, the Lids Sports Group operates Lids Team Sports, an athletic team dealer business.

Johnston & Murphy retail shops sell a broad range of men's footwear, luggage and accessories. Women's footwear and accessories are sold in select Johnston & Murphy retail locations. Johnston & Murphy shops average approximately 1,525 square feet and are located primarily in better malls and in airports throughout the United States. Johnston & Murphy opened its first store in Canada during the fourth quarter of Fiscal 2012. The Company also has license and distribution agreements for wholesale and retail sales of Johnston & Murphy products in various non - U.S. jurisdictions. The Company also sells Johnston & Murphy footwear and accessories in factory stores, averaging approximately 2,325 square feet, located in factory outlet malls, and through a direct-to-consumer catalog and e-commerce operation. In addition, Johnston & Murphy shoes are also distributed through the Company's wholesale operations to better department and independent specialty stores.

The Licensed Brands segment markets casual and dress casual footwear under the licensed Dockers® brand to men aged 30 to 55 through many of the same national retail chains that carry Dockers slacks and sportswear and in department and specialty stores across the country. The Company entered into an exclusive license with Levi Strauss & Co. to market men's footwear in the United States under the Dockers brand name in 1991. Levi Strauss & Co. and the Company have subsequently added additional territories, including Canada and Mexico and certain other Latin American countries. The Dockers license agreement was renewed July 23, 2012 for a term expiring November 30, 2015, subject to extension for an additional 3-year term if certain conditions are met. The Company acquired SureGrip® Footwear as part of its Keuka Footwear acquisition in the third quarter of Fiscal 2011. The Company sources and distributes this slip-resistant, occupational footwear to employees in the hospitality, healthcare, and other industries.

Strategy
The Company's long-term strategy has been to seek organic growth by: 1) increasing the Company's store base, 2) increasing retail square footage, 3) improving comparable store sales, 4) increasing operating margin and 5) enhancing the value of its brands. In Fiscal 2010, the Company slowed the pace of new store openings and focused on inventory management and cash flow in response to economic conditions. The Company also focused on opportunities provided by the economic climate to negotiate occupancy cost reductions, especially where lease provisions triggered by sales shortfalls or declining occupancy of malls would permit the Company to terminate leases. The pace of the Company's organic growth may be limited by saturation of its markets and by economic conditions. To address potential saturation of the U.S. market, certain of the Company's retail businesses have opened retail stores in Canada, beginning in Fiscal 2011.

To further supplement its organic growth potential, the Company has made acquisitions, including the acquisition of the Schuh Group in June 2011 and several smaller acquisitions of businesses in the Lids Sports Group's markets, and expects to consider acquisition opportunities, either to augment its existing businesses or to enter new businesses that it considers compatible with its existing businesses, core expertise and strategic profile. Acquisitions involve a number of risks, including, among others, inaccurate valuation of the acquired business, the assumption of undisclosed liabilities, the failure to integrate the acquired business appropriately, and distraction of management from existing businesses. The Company seeks to mitigate these risks by applying appropriate financial metrics in its valuation analysis and developing and executing plans for due diligence and integration that are appropriate to each acquisition.

More generally, the Company attempts to develop strategies to mitigate the risks it views as material, including those discussed under the caption "Forward Looking Statements," above, and those discussed in Item 1A, Risk Factors. Among the most important of these factors are those related to consumer demand. Conditions in the external economy can affect demand, resulting in changes in sales and, as prices are adjusted to drive sales and manage inventories, in gross margins. Because fashion trends influencing many of the Company's target customers can change rapidly, the Company believes that its ability to react quickly to those changes has been important to its success. Even when the Company succeeds in aligning its merchandise offerings with consumer preferences, those preferences may affect results by, for example, driving sales of products with lower average selling prices. Moreover, economic factors, such as the relatively high level of current unemployment and any future economic contraction, may reduce the consumer's disposable income or his or her willingness to purchase discretionary items, and thus may reduce demand for the Company's merchandise, regardless of the Company's skill in detecting and responding to fashion trends. The Company believes its experience and discipline in merchandising and the buying power associated with its relative size and importance in the industry segments in which it competes are important to its ability to mitigate risks associated with changing customer preferences and other changes in consumer demand.

Summary of Results of Operations
The Company's net sales increased 15.5% during the second quarter of Fiscal 2013 compared to the same quarter of Fiscal 2012. The increase reflected (i) the acquisition of the Schuh Group in the second quarter last year, which contributed $81.2 million in sales during the three months ended July 28, 2012 as compared to $34.0 million during the second quarter of Fiscal 2012, (ii) an 8% increase in Journeys Group sales, (iii) a 2% increase in Lids Sports Group sales, (iv) a 6% increase in Johnston & Murphy Group sales, and (v) a 20% increase in Licensed Brands sales. Gross margin as a percentage of sales was up slightly at 50.5% during the second quarter of Fiscal 2013, compared to 50.4% for the same period last year. Selling and administrative expenses decreased as a percentage of net sales during the second quarter of Fiscal 2013, reflecting expense decreases as a percentage of net sales in all of the Company's business segments, except Schuh Group. In addition, selling and administrative expenses decreased as a percentage of sales due to the inclusion in last year of $6.4 million of acquisition related costs. Earnings from operations increased as a percentage of net sales during the second quarter of Fiscal 2013, reflecting improved earnings from operations as a percentage of net sales in all the Company's business segments operated, except Johnston & Murphy Group and Schuh Group, and the inclusion of acquisition related costs in the second quarter of Fiscal 2012.

Significant Developments
Schuh Acquisition
On June 23, 2011, the Company, through its newly-formed, wholly-owned subsidiary Genesco (UK) Limited ("Genesco UK"), completed the acquisition of all the outstanding shares of Schuh Group Ltd. ("Schuh") for a total purchase price of approximately £100 million, less £29.5 million outstanding under existing Schuh credit facilities, which remain in place, less a £1.9 million working capital adjustment and plus £6.2 million net cash acquired, with £5.0 million withheld and payable in June 2013. The Company financed the acquisition with borrowings under its existing credit facility and the balance from cash on hand. The purchase agreement also provides for deferred purchase price payments totaling £25 million, payable £15 million and £10 million on the third and fourth anniversaries of the closing, respectively, subject to the payees' not having terminated their employment with Schuh under certain specified circumstances. This amount will be recorded as compensation expense and not reported as a component of the cost of the acquisition.

Headquartered in Scotland, Schuh is a specialty retailer of casual and athletic footwear sold through 69 retail stores in the United Kingdom and the Republic of Ireland and 14 concessions in Republic apparel stores as of July 28, 2012. The Company completed the acquisition in order to enhance its strategic development and prospects for growth and provide the Company with an established retail presence in the United Kingdom and improved insight into global fashion trends. The results of Schuh's operations for the three months ended July 28, 2012 include net sales of $81.2 million and an operating loss of $(0.5) million, and for the six months ended July 28, 2012 include net sales of $151.5 million and an operating loss of $(3.5) million, and have been included in the Company's Condensed Consolidated Financial Statements for the three months and six months ended July 28, 2012. During the three months and six months ended July 28, 2012, compensation expense related to the Schuh acquisition deferred purchase price obligation was $2.9 million and $5.9 million, respectively. This expense is included in the operating loss for the Schuh Group segment.

Network Intrusion
On December 10, 2010, the Company announced that it had suffered a criminal intrusion into the portion of its computer network that processes payments for transactions in certain of its retail stores. Visa, Inc. and MasterCard Worldwide have asserted claims against the Company's acquiring banks totaling approximately $15.4 million in connection with the intrusion, which amounts may be indemnifiable by the Company. The Company disputes the validity of these claims and intends to contest them vigorously and thus has no accrual. There can be no assurance that additional claims related to the intrusion will not be asserted by these or other parties in the future, but the Company does not currently expect any potential additional claims to have a material effect on its financial condition or results of operations.

Asset Impairment and Other Charges
The Company recorded a pretax charge to earnings of $0.4 million in the second quarter of Fiscal 2013, primarily for retail store asset impairments. The Company recorded a pretax charge to earnings of $0.5 million in the first six months of Fiscal 2013, including $0.4 million for retail store asset impairments and $0.1 million for network intrusion expenses.

The Company recorded a pretax charge to earnings of $0.3 million in the second quarter of Fiscal 2012, primarily for retail store asset impairments. The Company recorded a pretax charge to earnings of $1.6 million in the first six months of Fiscal 2012, including $1.1 million for retail store asset impairments, $0.4 million for network intrusion expenses and $0.1 million for other legal matters.

Comparable Store Sales
Comparable store sales begin in the fifty-third week of a store's operation. Temporarily closed stores are excluded from the comparable store sales calculation for every full week of the store closing. Expanded stores are excluded from the comparable store sales calculation until the fifty-third week of operation in the expanded format. Unless otherwise specified, e-commerce and catalog sales are excluded from comparable store sales calculations.

Results of Operations - Second Quarter Fiscal 2013 Compared to Fiscal 2012

The Company's net sales in the second quarter ended July 28, 2012 increased 15.5% to $543.5 million from $470.6 million in the second quarter ended July 30, 2011. Gross margin increased 15.6% to $274.2 million in the second quarter this year from $237.3 million in the same period last year and increased as a percentage of net sales from 50.4% to 50.5%. Selling and administrative expenses in the second quarter this year increased 9.2% from the second quarter last year but decreased as a percentage of net sales from 50.0% to 47.3%. The Company records buying and merchandising and occupancy costs in selling and administrative

expense. Because the Company does not include these costs in cost of sales, the Company's gross margin may not be comparable to other retailers that include these costs in the calculation of gross margin. Explanations of the changes in results of operations are provided by business segment in discussions following these introductory paragraphs.

Earnings from continuing operations before income taxes ("pretax earnings") for the second quarter ended July 28, 2012 were $15.7 million compared to $0.6 million for the second quarter ended July 30, 2011. Pretax earnings for the second quarter ended July 28, 2012 included asset impairment and other charges of $0.4 million primarily for retail store asset impairments. Pretax earnings for the second quarter ended July 28, 2012 also included $2.9 million in expense related to the deferred purchase price obligation related to the Schuh acquisition. Because the deferred purchase price for Schuh is contingent on the payees' continuing employment with Schuh (subject to certain exceptions), U.S. Generally Accepted Accounting Principles require that it be expensed as compensation across the period until payment is due. Pretax earnings for the second quarter ended July 30, 2011 included asset impairment and other charges of $0.4 million, primarily for retail store asset impairments. Pretax earnings for the second quarter July 30, 2011 also included $6.4 million in costs related to the Schuh acquisition and $1.4 million in expenses related to the deferred purchase price obligation related to the Schuh acquisition.

Net earnings for the second quarter ended July 28, 2012 were $10.5 million ($0.43 diluted earnings per share) compared to a net loss of $(0.4) million ($0.02 diluted loss per share) for the second quarter ended July 30, 2011. The net loss for the second quarter ended July 30, 2011 included $0.7 million ($0.03 diluted loss per share) charge to earnings (net of tax) primarily for anticipated costs of environmental remediation related to facilities formerly operated by the Company. The Company recorded an effective income tax rate of 32.9% in the second quarter this year compared to 38.6% in the same period last year. This year's tax rate is lower due to a tax rate reduction in the UK and increases in certain state tax credits.

Journeys Group

                                     Three Months Ended
                                   July 28,      July 30,           %
                                       2012          2011      Change
                                   (dollars in thousands)
Net sales                       $   209,439     $ 194,693         7.6 %
Earnings (loss) from operations $     2,065     $  (3,875 )        NM
Operating margin                        1.0 %        (2.0 )%

Net sales from Journeys Group increased 7.6% to $209.4 million for the second quarter ended July 28, 2012 compared to $194.7 million for the same period last year. The increase reflects primarily a 6% increase in comparable store sales. The comparable store sales increase reflected an 8% increase in average price per pair of shoes, reflecting changes in pricing, product mix and lower markdowns, and a 3% decrease in unit sales. Journeys Group operated 1,147 stores at the end of the second quarter of Fiscal 2013, including 152 Journeys Kidz stores, 52 Shi by Journeys stores, 133 Underground by Journeys stores and 20 Journeys stores in Canada, compared to 1,154 stores at the end of the second quarter last year, including 152 Journeys Kidz stores, 54 Shi by Journeys stores, 141 Underground by Journeys stores and six Journeys stores in Canada.

Journeys Group earnings from operations for the second quarter ended July 28, 2012 increased to $2.1 million compared to a loss of $(3.9) million for the second quarter ended July 30, 2011. The increase was due to increased net sales, increased gross margin as a percentage of sales, reflecting lower markdowns, and to decreased expenses as a percentage of net sales, reflecting leveraging of store related costs including occupancy costs and depreciation.

Schuh Group

                          Three Months Ended
                       July 28,       July 30,           %
                           2012           2011      Change
                        (dollars in thousands)
Net sales            $   81,156      $  33,973          NM
Loss from operations $     (545 )    $     (77 )        NM
Operating margin           (0.7 )%        (0.2 )%

Net sales from the Schuh Group were $81.2 million for the second quarter ended July 28, 2012, compared to $34.0 million for the second quarter ended July 30, 2011. Net sales for Schuh Group in last year's second quarter include sales for approximately six weeks since the Company acquired Schuh on June 23, 2011. Comparable store sales for Schuh Group were 9% for one month ended July 28, 2012, the first month it was eligible for inclusion in the Company's comparable store numbers . Schuh Group operated 69 stores and 14 concessions at the end of the second quarter of Fiscal 2013, compared to 59 stores and 16 concessions at the end of the second quarter of Fiscal 2012.

Schuh Group loss from operations was $(0.5) million for the second quarter ended July 28, 2012, compared to $(0.1) million for the second quarter ended July 30, 2011. The loss included $2.9 million and $1.4 million in compensation expense related to a deferred purchase price obligation in connection with the acquisition for the second quarter of Fiscal 2013 and 2012, respectively. The loss also includes $2.8 million and $0.3 million related to accruals for a contingent bonus payment for Schuh employees provided for in the Schuh acquisition for the second quarter of Fiscal 2013 and 2012, respectively. See Note 2 to the Condensed Consolidated Financial Statements for additional information related to the Schuh acquisition.

Lids Sports Group

                              Three Months Ended
                             July 28,      July 30,          %
                                 2012          2011     Change
                            (dollars in thousands)
Net sales                $    181,879     $ 177,523        2.5 %
Earnings from operations $     20,571     $  18,106       13.6 %
Operating margin                 11.3 %        10.2 %

Net sales from Lids Sports Group increased 2.5% to $181.9 million for the second quarter ended July 28, 2012 compared to $177.5 million for the same period last year, reflecting primarily a 2% increase in comparable store sales and a 2% increase in average Lids stores operated (i.e., the sum of the number of stores open on the first day of the fiscal quarter and the last day of each fiscal month during the quarter

divided by four). The comparable store sales increase reflected a 1% increase in comparable store units sold, primarily reflecting demand which management believes is driven by style trends. The average price per hat was flat for the second quarter this year. Lids Sports Group operated 1,021 stores at the end of the second quarter of Fiscal 2013, including 90 Lids stores in Canada and 122 Lids Locker Room and Clubhouse stores, compared to 994 stores at the end of the second quarter last year, including 80 Lids stores in Canada and 110 Lids Locker . . .