Welcome to the Genesco third quarter fiscal year 2009 release conference call. (Operator Instructions) At this time for opening remarks and introductions I would like to turn the call over to Mr. Bob Dennis, President and Chief Executive Officer of Genesco.

Good morning. Thank you for joining us for our third quarter fiscal 2009 conference call. Participating with me on the call today are Hall Pennington our Chairman and Jim Gulmi, our Chief Financial Officer. We will make some forward-looking statements in this call. They reflect our expectations as of today but actual results could be materially different. We refer you to our earnings release and to our recent SEC filings including the 10-Q for the second quarter for some of the factors that could cause differences from our expectations. And for those listening to the replay of this call, some of these factors can be read on the opening screen. As you know, we pre-announced our third quarter results and revised our outlook for the rest of the year. First, let me briefly review our actual third quarter results. Net sales increased approximately 5% to $390 million. Total company same store sales increased 2%. We reported diluted earnings per share from continuing operations of $0.43 per share for the quarter versus $0.23 last year on a GAAP basis which includes restructuring charges, merger related fees and tax benefits. As noted in the release last year's number without merger and restructuring costs were $0.39 versus $0.43 this year. We also continue to effectively manage inventories. As quarter end, year over year inventories were down 4%. During the third quarter we experienced significant erosion in our same store sales trends. We had a solid back-to-school, then comps deteriorated and this weakness has continued into November. Through November 16, same store sales for the month are down 9%. We are not providing a comp update beyond November 16 because Thanksgiving and Black Friday fell in the third week of the month last year versus the fourth week this year, making last weeks and…

I will now run through the P&L for the quarter starting at the top. Second quarter sales increased 5% to $390 million versus $372 million last year. Total comp store sales increased 2%. Journeys group sales increased 10% to $201 million and comps were up 5% for the quarter. Hat World group sales rose 6% to $93 million. Comp sales for the quarter increased 2%. The Underground Station group sales were down 9% to $24 million due to fewer stores versus the same period last year. The overall Underground Station group store count dropped 14% to 184 stores. Comps increased 1% for the quarter. Johnson & Murphy group sales were down 10% to $42 million. Johnson & Murphy wholesale sales decreased 2% for the quarter. Comp sales for the Johnson & Murphy shops declined 16% and factory stores were down 10%. Licensed brand sales increased 3% to $30 million. The Dockers brand itself had a sales increase of 11% in the quarter on top of a 12% increase last year. Now turning to gross margin, total gross margin for Genesco was up modestly to 50.8% compared to 50.5% last year with margin gains in Journeys, Hat World and Underground Station. Johnson & Murphy's gross margin was off by about one percentage point due in part to higher mark downs. Licensed brands gross margin declined 300 basis points primarily due to mix changes and increased product costs. Now turning to SG&A, total SG&A as a percentage of sales decreased to 46% in the quarter compared to 46.8% last year. Excluding merger related expenses of approximately $200,000 this year, and $6.1 million last year, SG&A as a percentage of sales was 46% compared to 45.1% last year. This includes about a 60 basis point increase this year in bonus accruals. We experienced…

In conclusion, before we take your questions, I'd like to put a bit of perspective around these results and our view of our prospects both short term and long term. This is unquestionably a difficult retail environment. No financial news headline in the third quarter was calculated to encourage consumers to buy things, and not surprisingly we didn't perform quite as well as we had hoped. But we still performed reasonably well under the circumstances if you consider that we had one, positive sales growth, two, positive overall comp sales gains, three, a positive comp gain in every division except Johnson & Murphy, and most importantly fourth, an earnings per share increase over the third quarter last year after adjustments. Again, not surprisingly, we have adjusted our outlook for the fourth quarter. We have tried to be realistic in our outlook and have extrapolated from the recent negative sales trends while reflecting the various factors we've called out in our remarks today to arrive at the best estimate of how well we might do for the balance of the year. We note that our updated fourth quarter earnings guidance this year represents an increase over last year. Longer term, for reasons both financial and strategic, we will come through this market as a force to be reckoned with in the eventual recovery. As Jim has told you, we have a strong financial position with plenty of availability under committed credit lines and we expect cash flows to be strong in the near term as we adjust our store opening pace to the environment and manage inventories and other assets. Just as importantly, our strategic position remains compelling. Our concepts occupy strong defensible niches in the market and their positions will probably be strengthened by any future retail shakeout. As I mentioned earlier, one positive effect of current conditions that we're already seeing and that we'll enjoy for years to come is the potential for better deals on retail space for both new stores and renewals. We have a large number of renewals this year and next and are seeing significantly better economics already. So there are long term positives for strong players even in this economy. Finally, in terms of execution, we have a leadership team made up of people who have come through bad markets more than once in the course of their careers and they know how to navigate through them successfully. Of course markets like these do require navigation and we are managing prudently watching inventories and expenses and managing for strong cash flow while we continue to work hard to offer our customers the merchandise they're looking for in the places they like to shop. Now I would like to turn the call over for your questions.

(Operator Instructions) Your first call comes from Jeffrey Klinefelter – Piper Jaffrey. Jeffrey Klinefelter – Piper Jaffrey: A couple of questions for you. The first would be the online business or direct business versus the store business, it sounds like you had a very strong momentum through the year both of Journeys and Hat World and just curious how you think about that relative to stores, store sizes and ultimate number of stores or your footprint domestically. It seems like in some cases, the bigger that your online business, the more of an opportunity you might have to actually contain the size of your store footprint and maybe you can just help us understand how you think about that on a longer term basis.

I don't think we view our internet business as a reason to not open more stores. There's very different kinds of customers out there. There's the mall shopper and then there's the internet customer, and obviously the internet is gaining a bit of share. And so you could argue with a margin that might say that marginal store might have opened looks different because more sales flow over to the internet. We actually see the internet as a nicely integrated piece with the stores. In the Journeys stores we're making some technology changes that will allow the customer to actually see our full range of inventory in stores that don't carry it and that might actually enhance sales in the stores. Hat World is a very special situation because as you know, no store comes even close to carrying the skew count of Hat World. So we always say if you're down in Florida, that you're unlikely to find a Purdue hat in a hat store anywhere. So the internet fills that very special need. And once again, we run that integrated with the store so you could buy your Purdue hat at our store and have it shipped there for free. I'm not sure it's going to impinge too much on the footprint. It's more an integrated activity and we'll still look at every store on it's own merits. Jeffrey Klinefelter – Piper Jaffrey: So you look at it more as a way ultimately to control or contain the size of the store and still represent the full assortment of products.

That's probably a better way of looking at it. Jeffrey Klinefelter – Piper Jaffrey: In terms of this real estate, it sounds like number one the most important consideration facing retailers today, is this shift in leverage in the market place between landlords and retailers. Could you just give a little bit more color maybe directionally help quantify what you think the rate improvement are looking for rents or do you see store closings in certain markets, either department stores or specialty stores being a primary driver of when you'll consider looking at additional store locations, just the balance between cheaper rents and actually seeing an opportunity for more share opening up in the market.

I think it's both. The landlords have really turned around on us and have become much more flexible. We see that as we've changed our plans on the fly, decided to do somewhat fewer stores even this year, but of course we're obviously looking at stores for next year. As we reject deals, they just keep coming back better. So it's a little hard to quantify right now, because I think it's pretty much on the fly. There's no doubt that it's getting better. And we see it more or less anecdotally. We are tracking it. We have a way of measuring what our re-news and our renew increases. We see that coming back out of the percent increase that we're having to pay and on new stores we're seeing when we reject deals, they get re-cut and put back in front of us very quickly. In terms of store closing driving opportunities, we're really not hooked to store closings all that much because in most of the malls where they're leased up, we're in most of those. And so there's been availability and most of the other malls where we might want to be there's simply more availability which is putting increased pressure on the landlord to find tenants, and that works in our favor. Jeffrey Klinefelter – Piper Jaffrey: On inflation, any updates there and what you're hearing out of your suppliers in the footwear space in particular?

Some dramatic changes. It's gone from the suppliers are now saying we need more business and obviously when they're coming to you asking for more business, you pick up a lot more flexibility on negotiation. There's still currency swings out there which are still going to leave some uncertainty in it, but certainly in terms of negotiating with factories in those situations where we deal directly, we're seeing a lot more flexibility and we presume our vendors in our branded businesses are experiencing the same thing.

Your next question comes from John Shanley – Sussquehanna Financial. John Shanley – Sussquehanna Financial: Skate has been a major product category for the Journeys business for some time. Are there other new fashion products that the merchandising team at Journeys have identified that may supplement skate as we enter both fourth quarter and fiscal '10?

You've probably seen our stores. We're set up for holidays so obviously for holiday there's not a whole lot that has changed. Within the skate space, there's been nice product development and so there is some freshness in the category but I wouldn't say that we are calling out another category that comes on top of that which reflects something big and new. As you know, our guys are always testing new ideas. In terms of looking at spring, we don't see anything big in terms of changing the product assortment. We see a lot of things that we're testing that could become exciting and for those, you just pretty much have to stay tuned. John Shanley – Sussquehanna Financial: So skate will continue and spring to be a major component of the merchandise mix?

Yes, absolutely. John Shanley – Sussquehanna Financial: Turning to Hat World for a second, is the merchandise mix at the urban stores and the suburban units and the margins for those two components of the division essential different from one another?

The merchandise difference between an urban store and a suburban store in Hat World is gigantic. As you know we have big differences as you go from market to market because of teams. But even if you're in one market, and I'll use Indianapolis, the home city of Hat World as an example, they're in Lafayette Square which is pretty urban and they're in Capstan which is a very suburban. Last time we looked at it, the skew overlap between those two stores was only in the 20% to 30% range. The fashion store, as we call them in the urban mall is very heavily concentrated in more hip hop inspired, major league baseball to some extent, NBA. New Era which is our main vendor plays an even bigger role in the urban stores because that's the most important brand essentially. That's sort of the Nike if you will of that customer base and so the mix is very different. In terms of margins, the margin structure is pretty similar. I don't have a number off hand to give you but the margins in the two stores are going to be pretty similar because we don't differ that much across ranges. If anything, urban margins might be a little lower because we don't do as much college business. We do very little college there, and college is our highest margin business, so if I had to guess at it, I would guess that we're probably a little lower in urban stores, but we probably hit a higher average price. So that's a trade off. John Shanley – Sussquehanna Financial: Underground Station is still clearly struggling. Is there a time line in place whereby the company will make a decision on the ongoing prospects at Underground? Do you have a cut off date that you've given the division in terms of reaching the goals that you set for them in terms of operating profit margins?

On Underground Station first of all, they had a very strong first half, up 9%. They had a strong back-to-school, and they have just now seen some recent weakness, and we know that their core customer is challenged. We're resisting the temptation to have any kind of knee jerk reaction to their performance. We have a strategy that we think for seven months of this year was proving itself out and we just continue to gauge its performance, and at the same time, we're doing a bunch of things to maintain flexibility with that. We're closing stores and we're shortening up the lease terms that were we to take a different direction with it, we're in a much stronger position. What we have said in the past is we are looking for Underground Station to become profitable next year and that is still the target that we have for the business. I'll tell you that the best financial outcome regardless of which route you would choose to take with Underground Station is the route that we're on right now, which is again closing stores and shortening up lease terms. So we're going to keep watching. We're alert to the fact that it has had a setback in the last couple of months. We'll watch it carefully, but we still have this goal of having it profitable next year. That's the way we're thinking about it.

Your next question comes from Mitch Kummetz – Robert W. Baird. Mitch Kummetz – Robert W. Baird: Let me start with Journeys. You had mentioned that you have comps through November 16. I think the guidance for the fourth quarter if you take the mid point of the range is basically flat. Some of that improvement is a function of the calendar but I think some of that is also has to do with what you talked about in the pre-release, timing of vendor shipments. Could you just elaborate on that second point a little bit?

We looked very closely at some key vendors and we noticed that last year we landed some product in early November and we got a huge spike, and if you look at what we gave today, I think we said that for that comparable period in early November last year, we were up two. This year we were down nine. A large chunk of that can be accounted for by the landing of that very fresh product. This year we had brought it in early so we got a little help from it in October, and then the balance of our shipments on those product lines are arriving in late November. So there's just a bit of a delta in terms of timing of shipments that we called out. But we looked at Journeys. Journeys overall for the quarter last year was minus seven and so that plus two of the first two weeks is a little bit of a head fake in terms of how well Journeys is doing and we were going against that plus two when we reported minus nine. When in fact, we're really going against minus seven over the balance of the quarter and we think that's probably the better indicator of what the comparison looks like. Then in addition to that, we've got the Pack Sun comparisons, so we're still going against a period where last year Pack Sun was fully assorted in the skate category and this year we get to hopefully pick up some of that business. Mitch Kummetz – Robert W. Baird: When you talk about the later delivery on the balance of these vendor shipments, can you say specifically what it is?

We prefer not to call out a hot product for competitive reasons. Mitch Kummetz – Robert W. Baird: Healy's, that has been a head wind for your business through the second quarter. Now I'm guessing that it's in terms of having replaced it with other products, it's a bit of a tail wind here in Q3 and then going forward, can you talk a little bit about the impact that that's having on your comp and your margins in the third quarter from you're having replaced that business a year ago or some of that business?

In the third quarter, that's when we took some substantial mark downs last year on Healy's and we also went into the quarter with a fairly sizable inventory commitment which essentially was an opportunity cost. So when we went through the third quarter we obviously had the positive of having other inventory. There's no one thing where you can say this is what we replaced Healy's was. We split the dollars over the assortment and honestly we didn't have to face up to the margin pressures that we had last year. As we go into the fourth quarter, that effect starts to get diminished because we started to wind down our Healy's position in the fourth quarter. It's still in effect, but it's not as pronounced, and our margins since we took most of our hits in the third quarter, our margins actually got a little less severe. That said, we'll still have margin improvement year over year in that category. And at this point, Healy's is another one of those little vendor businesses that we have that goes forward, and we own all the stuff that allows us to make our typical margin. Mitch Kummetz – Robert W. Baird: On Johnson & Murphy, either I missed it or you didn't give it. What is your Q4 comp expectation for that business?

It's from low teens to possibly twice that negative. Mitch Kummetz – Robert W. Baird: You talked a little bit about store labor being a key cost of yours and it sounds like you're going to flex that a little bit in order to try to take some of the expense out of the business. How are you thinking about that in the fourth quarter? And maybe you could comment on your views of SG&A in Q4. Are you looking for that to be sort of flattish to last year on a dollar basis, or how are you thinking about those expenses?

It's natural that as we look at our sales trends, we will manage ours in a way that is appropriate to what sales volumes we're doing, and that's on a dollar basis the biggest controllable that we have. It will be a little bit of manage as you go kind of thing, but it is a point of negative leverage. We can't get away from that. We can't cut selling costs as quickly as sales. If sales came down dramatically we can't cut selling costs to make up for that so there would still probably be a negative impact in terms of SG&A leverage.

There will be negative leverage just like negative leverage in the quarter on the high side of the guidance that we gave. The absolute dollars will be up a little bit, and I don't have all the details in front of me but we do have more stores so rent expense will be up resulting in an additional selling expense. So there will be some negative leverage on the high side, not a lot but some, and absolute dollars will be up a little.

Your next question comes from Justin Boisseau – Gates Capital Management Justin Boisseau – Gates Capital Management: A few questions on caps during the period, number one, what was you CapEx in the quarter, and then number two, I think you still had $30 to $40 million of cash taxes due as a result of the settlement this year. I wondered if you'd paid any of those in Q3 or if you're expecting to pay all those in Q4. And then finally, I think there was a payment expected this year related to an environmental settlement. I wondered if you that was paid in the third quarter or if you're still expecting it in the fourth quarter.

In terms of capital expenditures for the quarter, the quarter was $10.8 million and depreciation was $11.7 million. And in terms of the taxes in connection with the settlement, the final tax payment, we paid everything except for around $20 million or so which we'll pay in the month of January. But other than that, we have paid everything up through the third quarter. In the environmental, we still have to pay some of that. We've extended that so we will not be making, we may make a small payment in the fourth quarter, but we will not be making a full payment in the fourth quarter. We've extended that payment stream.

There are no further questions so I'll turn the call back over to Mr. Bob Dennis.

Thank you everyone for joining us this morning. We appreciate your interest in Genesco and have a great Thanksgiving.