Shoe Zone chief executive Anthony Smith has told Drapers he is confident the value footwear chain’s “self-help” approach will continue to drive profitability even if consumer confidence falls in the run up to the general election in May.
The retailer, which on January 14 posted a 124% rise in pre-tax profits to £11.4m in its first full-year results after floating on London’s Alternative Investment Market (Aim) in May, said it will boost profits further by negotiating better rent deals and continuing to close or relocate loss-making stores.
Smith dismissed others’ concerns about the effect this year’s election may have on consumer confidence. “It won’t have an impact; we are about self-help. We will sort out better rent deals with landlords to drive profitability; it doesn’t have a lot to do with how customers are feeling.”
He continued: “The successful reorganisation of our store portfolio has been a major factor in increasing profits. The property market is still really exciting for us, given the secondary nature of our portfolio.”
Revenue dropped 10% to £172.9m in the year to October 4, reflecting the planned closure of 25 temporary stores, bringing its store count to 545. It opened 17 stores, including six relocations, during the year and completed 45 refits, spending £1.9m on capital expenditure.
Since year end the Shoe Zone has opened six stores – two relocations and four new branches – and has agreed terms on another 10, comprising seven relocations and three new openings.
Smith also said Shoe Zone’s large retail footprint complemented its online offering, which has grown to 5% of total sales from 3.1% in 2013.
“Online is a massive opportunity for us, as we have a bigger range for shoppers to choose from and the average transaction value goes up 50%. It was set up to support our high street stores as we offer click-and-collect, free returns to store and an order in store option to pick up lost sales. It absolutely complements our high street business.”