Backward step for Shoe Zone due to ‘tough high street trading environment’
Footwear retailer Shoe Zone has said it expects its full year results to be below expectations due to ‘challenging’ business conditions.
According to a trading statement from the group, the overall performance of the brand has been impacted by the ‘tough high street trading environment’.
However, Shoe Zone’s new ‘Big Box’ store concept - out-of-town stores with known footwear brands as well as own-brand products on offer - is ‘progressing strongly’ alongside its new digital strategy.
The group, which employs around 3,500 workers across the UK and the Republic of Ireland, has also revalued its 17 freehold properties, writing down the value by £3.1m to £5.3m.
The trading update comes as the group announced its chief executive Nick Davis has resigned to pursue other business interests.
Anthony Smith, chief executive of Shoe Zone, commented: “As has been widely publicised, the UK Hsgh street is currently facing a challenging environment in which to operate.
“The pressure on the retail property market has enabled Shoe Zone to achieve an average 23.5 per cent fall in rents on renewal and average outstanding lease length of only two years.
“As a consequence of this and the tough freehold property market, our freehold assets had to be revalued to represent fair value and give us future flexibility.
“While we therefore face a short-term impact on our balance sheet, we do not anticipate any change to our dividend policy, reflecting our confidence and excitement in the long-term growth opportunities through the Big Box roll-out, continued operational improvements and our multi-channel proposition.”
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