The Business Story Behind Johnston & Murphy Canada Store Closures

In mid-January 2025, Johnston & Murphy — the 175-year-old American footwear and apparel brand best known for polished dress shoes and classic leather goods — quietly pulled the plug on its Canadian operations. The company closed all of its Canadian brick-and-mortar stores and shut down the Canada-specific e-commerce site effective January 18, 2025, a move that surprised shoppers and retail watchers but reflected a series of deeper business pressures and strategic choices that had been building for years.

This article traces the business logic behind that decision: the immediate triggers, the financial and operational context from the parent company Genesco, the structural challenges facing premium non-athletic footwear retailers, the human and market impacts in Canada, and what the exit tells us about retail strategy in a rapidly changing North American market.

The announcement and the immediate facts

Johnston & murphy canada store closures online notice to Canadian customers was straightforward: the brand was no longer accepting orders for shipment to Canada and its Canadian retail locations would close on January 18. In public reporting the company confirmed that six Canadian stores — including locations at major shopping centres and airports — were affected and remaining Canadian inventory would be redirected to U.S. operations.

The shuttering was not an isolated retail promotion or temporary restructuring. It was a permanent market exit: stores closed, the Canadian e-commerce storefront went offline, and consumers were told returns and exchanges would be handled under new terms. For loyal customers who’d come to rely on the brand’s leather shoes and seasonal collections, the change was sudden and unquestionably disruptive.

Why leave Canada? Immediate business drivers

Several practical factors converged to make Canada a target for consolidation:

1. Cost pressure and margin compression. Rising input costs — from leather and materials to freight and labour — have squeezed margins across footwear retail. For a brand with relatively small scale in a market like Canada, the economics of running a handful of full-service stores alongside a dedicated website became increasingly difficult to justify. Reporting and industry commentary at the time highlighted these rising costs as a key driver.

2. Scale and performance. Johnston & Murphy is a brand under Genesco, which manages a portfolio that includes growth brands (like Journeys) and traditional brands (like Johnston & Murphy). When a store footprint in any market is small (six stores, in this case) and underperforming relative to head-office investment and logistical overhead, exit can be the rational choice. Genesco’s financial updates and store-count disclosures from fiscal 2025 show the company has been actively pruning underperforming locations and optimizing its retail footprint.

3. Operational complexity of cross-border e-commerce. Running a separate Canadian online site entails currency management, shipping pathways, returns processing, and local taxes and duties. With inventory flows complicated by cross-border warehousing and fulfilment, many mid-sized retailers concluded it was simpler and more cost-effective to centralize e-commerce in the U.S. rather than maintain a national site with its own P&L. Retailers that can’t reach a critical mass of online sales in a market often choose this path.

4. Strategic focus on stronger channels and markets. Genesco’s public filings and comments during the relevant period showed a broader strategic imperative: invest behind channels and brands that drive the most return. That meant prioritizing Johnston & Murphy’s core U.S. markets, wholesale partnerships, and areas where digital momentum was stronger. When capital and management attention are finite, small international outposts are often first on the chopping block.

Taken together, these pressures made the Canada operation an obvious candidate for closure from a purely corporate economics standpoint.

The broader corporate context: Genesco’s strategy and finances

To understand Johnston & Murphy’s Canada shutdown you have to look at the parent company. Genesco — the Nashville-based retailer and wholesaler that owns Johnston & Murphy — had been navigating a mixed retail environment: stronger e-commerce performance in some divisions, softer brick-and-mortar results in others, and the ongoing challenge of channel balancing across a multi-brand portfolio.

In fiscal reporting around early 2025, Genesco highlighted both the resilience of some brands and the need to rationalize underperforming assets. The company reported modest ecommerce growth in some segments while noting pressures from weather-related disruptions and higher costs. Genesco also disclosed net store closures in the Johnston & Murphy group for fiscal 2025, underlining that the Canada exits were part of a larger retail optimization program.

Investors generally expect portfolio managers to shift resources toward higher-growth or higher-margin activities. That is the calculus that favors consolidating away smaller, loss-making geographies even if the brand retains loyal customers there.

Structural challenges for premium shoe retailers

Johnston & Murphy’s Canada exit mirrors broader, multi-year trends in the premium non-athletic footwear category:

• Casualization of dress codes. The steady shift toward business-casual and elevated athleisure has eroded demand for traditional dress shoes. Brands that built their reputation on Oxfords and brogues have had to reinvent product mixes with hybrid styles and comfort technologies to stay relevant.

• Competition at both ends of the market. Premium shoemakers face competition from luxury labels at the high end and fast, digitally native brands at the lower price tiers. Meanwhile, the sneaker boom redirected discretionary footwear spending for years.

• Retail footfall declines and mall weakness. Many of Johnston & Murphy’s Canadian outlets were in malls and airports — channels that have seen uneven traffic patterns. For retailers with thin per-store profits, lower footfall can tip a location from marginal to unviable.

• Small national scale disadvantage. Operating a handful of stores in one country means fixed costs — management, leases, staff training — are spread across fewer sales. That lack of scale is a recurring reason brands withdraw from markets where they can’t achieve critical mass.

For Johnston & Murphy the answer was not a product failure — the brand remains respected for leather quality and workmanship — but rather a structural mismatch between the cost of maintaining a local retail and e-commerce operation and the revenue generated in that market.

The human and customer impact

Any store closure affects a range of stakeholders. Canadian employees at the closed stores faced layoffs or transfers; customers lost the convenience of local fit and service; and mall landlords lost a legacy retailer that helped anchor traditional shopping destinations.

Retail Insider and local outlets reported the practical fallout: liquidation sales, changes to returns and warranties, and customers lamenting loss of local access to a brand many had purchased for weddings, work wardrobes, or gifts. For frequent travelers accustomed to airport Johnston & Murphy stores, the closure represented a loss of easy access to a familiar product.

From a reputational angle, the brand tried to minimize friction by redirecting inventory and providing guidance online, but the net effect was a localized service gap that competitors and department stores were quick to try to fill.

Was Canada unique — or part of a broader “retail contraction” trend?

Johnston & Murphy was not the only U.S. or international retailer pulling back from Canada in recent years. The Canadian retail landscape has seen several overseas brands close stores or exit entirely, driven by factors such as higher operating costs, weaker consumer spending in certain categories, and logistical complexity of a market with a relatively small population concentrated across long distances.

That macro environment made Canada an easier decision for Genesco to rationalize than markets with larger revenue pools or faster growth. Still, company insiders and analysts framed the exit as an adjustment — not an indictment of the brand’s fundamentals. In other words: Johnston & Murphy’s products remain sellable and relevant, but the way they get to Canadian consumers needed to change.

What the closure means for Johnston & Murphy’s brand and Canadian shoppers

Short term, Canadian consumers lose immediate retail access; longer term, there are a few possible outcomes:

• Cross-border e-commerce or marketplace presence. Even after the Canadian site closed, Johnston & Murphy could still sell into Canada via global marketplaces, third-party cross-border platforms, or partnerships with local department stores and specialty retailers. That approach reduces fixed costs while preserving brand availability.

• Wholesale and partner-led distribution. Some brands retrench from direct retail but keep a presence through wholesale partners who shoulder local logistics and store operations.

• Eventual re-entry if economics improve. If sales growth resumes or if Genesco develops low-cost local fulfilment solutions, the company could test a return with pop-ups or a smaller store footprint.

For the brand, the closure must be managed carefully to avoid alienating loyal buyers. Communicating warranty support, facilitating returns, and keeping certain product lines available through alternate channels are pragmatic ways to retain customer goodwill.

Lessons for retailers and closing thoughts

The Johnston & Murphy Canada episode is instructive for executives and investors for several reasons:

1. Scale matters. Operating in a market without scale increases vulnerability. Small country footprints should be continually evaluated versus alternate low-cost go-to-market strategies.

2. Channel economics are everything. Maintaining a dedicated national e-commerce site has fixed costs. If the digital demand volume doesn’t reach a threshold, consolidation into a cross-border or marketplace model may be preferable.

3. Portfolio discipline is necessary. Parent companies must decide where to allocate scarce capital. For Genesco, focusing on higher-return operations and brands was the priority.

4. Transparency and customer care reduce reputational damage. How a brand winds down operations — its communications, support for returns, and liquidation handling — influences long-term customer loyalty.

5. Macro realities can outpace brand equity. Heritage and product quality help, but they cannot fully insulate a small national operation from unfavorable cost structures or strategic reallocation.

The Johnston & Murphy Canada store closures were not merely about a beloved shoe label leaving a market. They reflect the hard arithmetic retailers face when balancing rising costs, changing consumer habits, and the competing demands of a multi-brand corporate portfolio. For Canadian shoppers the loss is tangible; for the company, the move was a tactical retreat to preserve resources and focus on stronger, higher-return territories and channels.

If Genesco and Johnston & Murphy can keep customers connected — through wholesale partners, marketplaces, or smart cross-border solutions — the brand’s reputation and product lines will continue to find buyers. But the Canadian episode underscores a clear reality of contemporary retail: heritage and craftsmanship still matter, but they must be married to modern economics, nimble distribution, and the scale to make physical and digital operations sustainable.