Athletic shoe and apparel retailer The Finish Line is reconsidering its $1.5bn acquisition of Genesco Inc after the clothing and hat firm yesterday (30 August) posted poor second-quarter results.

In a statement late Thursday, The Finish Line said it was "disappointed" after Genesco earlier in the day revealed it had swung to a quarterly net loss of $4.2m, or 19 cents a share, compared with a profit of $5.9m, or 24 cents a share, a year earlier.

Nashville, Tennessee-based Genesco, which owns brands such as Journeys and Johnston & Murphy, blamed a late start to the back-to-school season and sales tax holidays in Texas and Florida, coupled with "a generally challenging retail environment.
Sales rose 8% to $328m, but fell short of expectations.

"Consistent with its responsibilities to The Finish Line's shareholders, the company is evaluating its options in accordance with the terms of the merger agreement," Finish Line said.

Genesco in June agreed to Finish Line's offer of $54.50 per share for the company, after rejecting two earlier takeover bids from Foot Locker. The transaction was due to be completed this autumn, and would have given a combined company with annual revenues of around $2.8bn and 2,870 retail stores.

The two shoe specialists were courting the trendy casual footwear retailer to try to offset slumping sales of athletic shoes.

However, Genesco has had its own share of problems, and earlier this year announced plans to shutter up to 57 underperforming stores in its Underground Station and Hat World groups.

Indianapolis-based Finish Line, which operates the Finish Line, Man Alive and Paiva nameplates, said it does not intend to make further comments at this time.

Shares of Finish Line jumped 13% on the news, while Genesco shares tumbled 13%.