Shoe Zone became the second retailer this week to say it rejected “doomsayers” predictions of the death of the high street. The discount footwear retailer, ranked Top100 in the InternetRetailing Top500, followed Mountain Warehouse in highlighting the importance of shops to its business – adding that three in 10 retail jobs are on the high street. It now plans to focus on new ‘hybrid’ format town centre stores, alongside its Big Box stores on retail parks, and its digital sales channel.
But it called on the government to recognise the “burden” of business rates for those selling through shops.
Anthony Smith, chief executive of Shoe Zone, has moved to the role from that of chairman following a board restructuring. The company is majority owned by the Smith family. He said: “Town centre stores remain an important component of our proposition and we don’t agree with doomsayers referring to the inevitable "death of the high street". However, it’s stark that over the past 10 years the rates paid as a proportion of our rent has increased from 26.4% in 2009 to 54.3% in 2019. Despite rationalising our store estate, the value of rates paid has increased by £700k despite having 38% fewer stores and 30% lower sales.
“For the retail sector to continue to play its important role in the UK economy, and town centres to serve their communities, it is vital that Government recognises the impact of the increasing financial burden placed on businesses on the High Street by successive governments and their policies.
“Notwithstanding the broader sector challenges, I am delighted to be back running this market-leading business, knowing its potential to produce great results. The core business model remains robust and combined with the refreshed strategy of Big Box expansion, higher Digital growth and Town Centre renewal, the board is confident that this enhanced strategic focus will improve customer experience, increase market share and drive shareholder returns."
The update came as Shoe Zone this week reported revenues of £162m in the year to October 5. That’s up by 0.9% on the previous year. Digital sales grew 9.2% to £10.6m over the year. Second half sales grew faster (+13%) than in the first half (+5.2%). Pre-tax profits of £9.6m were down from £11.3m previously.
Shoe Zone expects to expand its store portfolio for less as it looks for cheaper leases following other retailers’ CVAs (company voluntary agreements) and administrations. It says it is seeing “high availability and low demand for out-of-town retail premises”.
By the end of the financial year, the retailer’s 500 stores included 45 Big Box stores, following 21 openings of the out-of-town format. It has also trialled four new ‘hybrid’ town centre stores, in which half of the Big Box range is sold in a traditional Shoe Zone stores. It plans to move a further 20 to this format during the current year. At the same time it achieved a 23.6% rent reduction across 60 town centre lease renewals during the year, with leases running at an average of 2.1 years.
Online, it had more than a million engaged users on its website database following a year in which it created a standalone digital department. Visits to shoezone.com and shoezone.ie reached 10.5m in the current full year, while 351,000 orders were placed.
Shoe Zone said it had eliminated single use plastics in its own-label products, and reduces emissions by shipping via the sea. It has also increased its use of LED lighting and is transitioning its car fleet to hybrid fuel.
Image: Screenshot of Shoezone.com