Shoe Zone will continue to invest in its “Big Box” stores and digital channels to drive growth after a strong performance for 2018, chief executive Nick Davis told Drapers today.
Revenue at footwear retailer Shoe Zone was up 1.8% year on year to £160.6m for the 52 weeks to 29 September 2018. Stores modelled on the new concept stores accounting for £7.1m of sales.
“The Big Box concept was trying to do something different,” said Davis. “We’ve always have had clear customer promotions that have been underpinned by great value, but where we offer value in our in-town stores we have to comprise range for price.
“With Big Box it was about broadening our horizons with significantly more choice to bring in new customers, and also complementing our offering online.”
The value shoe retailer currently has 25 Big Box stores and will launch a further 20 in 2019, said chief financial officer Jonathan Fearn: “We currently have 12 in solicitors’ hands, with three or four already exchanged, and they will open between March and June. The remaining eight stores will open from September to miss the summer Sale period, allowing us to launch with new stock.”
Shoe Zone is cautious in its approach, however, and will now only sign five-year leases.
“We’d much rather go through a lease renewal than an upward-only rent renewal,” said Fearn. “It gives us the flexibility for the future, meaning if a property isn’t working for us we can look out of town, or further down the high street.”
A new digital strategy has also fuelled growth, Davis told Drapers. Digital revenue rose by 19.9% year on year to £9.8m and now represents 6.1% of revenue. The retailer plans to drive this further, and has hired a new online digital buyer to increase the digital exclusive offering.
Davis said: “Pushing growth will rely on increasing the line count, and previously we haven’t had the buying resources. At the moment we have 150 exclusive styles, but we think this can be greatly increased.”
A new autonomous digital department has also been announced to the business this week, along with a new head of digital.
“It has previously just been a subset of our store marketing function, but now will have its own photography, design and marketing resources,” said Davis. “In the medium term we think it can be a lot more significant for our business.
“We’ve had lots of recognition for what we’re doing online and how we now continue to grow is really about resources in digital marketing and SEO.”
The retailer held margins over the festive period by not discounting before Christmas.
Davis said: “December was a bit of a bloodbath on the high street with discounting, and we took a different approach. Although revenues were down a little bit, we held onto our margins with no pre-Christmas discounting.”