Shoe Carnival, Inc. announced it has acquired Rogan Shoes, a 53-year-old footwear company with 28 store locations in Wisconsin, Minnesota, and Illinois, for a purchase price of $45 million.
The acquisition was funded entirely with cash on hand.
“I am excited about the new opportunities for Rogan’s as it becomes part of the Shoe Carnival family,” said Pat Rogan, chief executive officer of Rogan’s. “We share a strong focus on customers and employees and this transaction provides the additional scale and expertise to drive future growth, create efficiencies and expand profitability with that shared focus as the foundation.”
The Rogan’s acquisition advances Shoe Carnival’s strategy to be the nation’s leading family footwear retailer. It immediately positions the company as the market leader in Wisconsin, and it establishes a store base in Minnesota, creating additional expansion opportunities.
Founded in 1971 with its first store in Wisconsin, Rogan’s has more than 600 employees and 28 stores in Wisconsin, Minnesota and Illinois. Rogan’s carries more than 100 name brands and thousands of styles of footwear for men, women, children, infants and toddlers.
Following an 18-month integration of the acquisition, the combined sales are expected to surpass $200 million by fiscal 2025. With the acquisition, Shoe Carnival’s store count increases to an all-time high of 429, keeping the Company on track to achieve its target to operate over 500 stores in 2028.
Mark Worden, president and CEO of Shoe Carnival said, “Our growth strategy is focused on becoming the nation’s leading family footwear retailer through a combination of organic growth initiatives and M&A activity that expands our geographic footprint and customer base. Over the past five decades the Rogan family has built a brand that is well known and trusted throughout the state of Wisconsin. As such, they have established a clear market leadership position in Wisconsin for work and family footwear, with a compelling assortment, great customer service, and a highly committed team of employees.”
The acquisition is expected to be immediately accretive to the company’s fiscal 2024 earnings and generate approximately $84 million in sales and approximately $10 million in operating income, excluding transaction and integration costs.
For the fiscal year ended Feb. 3, Shoe Carnival achieved the high end of management’s sales expectations with net sales of $1.176 billion, driven by strong sales growth during the December holiday period. Diluted earnings per share are in line with expectations to be between $2.65 – $2.75, with preliminary results in the mid-range, excluding any transaction costs related to the Rogan’s acquisition. The Company’s inventory optimization plan over delivered annual expectations, reducing inventory levels over $40 million, or over 10 percent, compared to the prior year.
The company ended fiscal 2023 with more than $110 million of cash, cash equivalents and marketable securities on hand, an increase of over $45 million versus the prior year. Fiscal year 2023 marks the 19th consecutive year the company ended the year with no debt, fully funding operations, new store growth, and store remodels entirely with cash on hand.
