The boss of Shoe Zone has warned that the footwear retailer may be forced to shut 100 stores if there is no reform to the business rates system.
Chief executive Anthony Smith has told the BBC that one fifth of the retailer’s stores could face closure if the government does not implement reforms, warning that leases would be reviewed every time they neared the end, or a break clause.
Shoe Zone has already closed 38% of its store estate over the past 10 years, and Smith is a vocal advocate for business rates reforms.
In the retailer’s latest trading update, released in January, Smith noted that rates paid as a proportion of rent had risen from 26.4% in 2009 to 54.3% in 2019, and had increased by £700,000, despite Shoe Zone having 38% fewer stores.
Shoe Zone’s business rates equate 6% of its sales.
Smith said at the time: ”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.”
Digital growth and out-of-town “big box” stores led to revenues rising by 0.9% to £162m for the 53 weeks to 5 October 2019.
Underlying profit before tax for the period fell to £9.6m, down from £11.3m the previous year.
Shoe Zone currently trades from around 500 stores across the UK.