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Mosaic puts Shoe Studio Group on the market

Mosaic Fashions has hoisted the for sale sign over its Shoe Studio Group business, in an effort to exit the increasingly competitive footwear sector and refocus its operation on its womenswear brands.

After months of speculation about the future of the footwear concession group, Mosaic Fashions this week confirmed it had hired corporate advisory boutique Hawkpoint to lead a sale of the business. Drapers first speculated Mosaic was considering offloading the poorly performing footwear division back in August 2008 and rumours of a sale have persisted throughout autumn.

Trading at Shoe Studio Group is believed to have been poor for at least 18 months and it is understood to have racked up losses in the high single digits for the current financial year, which ends on January 31. These heavy losses are understood to have prompted Mosaic, which is facing other more pressing problems linked to its Icelandic banks and shareholders, to push the button on an exit to focus on a refinancing for its womenswear operation. It also owns Oasis, Karen Millen, Warehouse, Principles and Coast.

Shoe Studio Group managing director Gordon Baird, who joined the firm last June, said: “Having completed a detailed review of the business and the opportunities in the footwear market, we believe that this is the right move to build on the company’s historic strength and maximise its future potential as a focused footwear specialist operation.”

Baird is believed to be keen to stay on at the business after a sale.

Mosaic Fashions acquired Shoe Studio as part of its merger with Rubicon Retail in June 2006. At that time Shoe Studio was thought to be making EBITDA of more than £12m on sales of £125m.

The integration of the footwear business into the much larger group was complex and impacted on sales and profitability. The industry also widely believes the business has fallen significantly behind the market on product, sourcing and pricing adding to its woes. However, Shoe Studio retains a strong portfolio of brands which include Pied a Terre, Bertie and Roberto Vianni, and these have significant potential. It also has the licenses for US brands Nine West and Kenneth Cole. These licensees are expected to approve a sale and continue their licensing deals if the business is sold to an experienced trade player.

Possible buyers for the group include its main competitor Kurt Geiger and footwear veteran David Spitz, who worked with former Shoe Studio owner Don McCarthy at the footwear group throughout the 1990s. Spitz is currently a non-executive director at footwear firm stylo“>Stylo and has links with various overseas suppliers and retailers. Office, which is owned by Sir Tom Hunter’s West Coast Capital fund, could also look at the business, although it is unclear whether it would be able to finance such a deal in the current climate. Another possible buyer could be Dune, where John Egan is chief executive. Egan was previously managing director of Shoe Studio, but left the business early last year.

Shoe Studio Group’s department store partners, which include House of Fraser, debenhams“>Debenhams, John Lewis and Fenwick, will watch the sale process with interest. Several have already been scaling back Shoe Studio’s presence within their stores.

Readers' comments (1)

  • Shoe Studio used to be a very good business. I hope someone buys it and makes it great again. Footwear suppliers can't afford to have another failing business. Too many shoe businesses are having a bad time. Also, Nine West and Pied a Terre do have value as brands. There has to be something in it for someone.

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