Office earmarks up to 15 stores for closure

Office Footwear retailer

Footwear chain Office has earmarked up to 15 stores for closure over the next two years.

The chief executive of its South African parent company Truworths told analysts that up to 15 loss-making stores, out of a total estate of approximately 139, would not have their leases renewed when they expired.

Michael Mark admitted there could be more closures at the chain, which the company acquired in a £250m deal in December 2015.

It is believed that Office has hired restructuring firm Alvarez & Marsal to scrutinise the chain and assess its options.

It was revealed in a trading update from Truworths last week that Office swung to an operating loss of £94.7 million in the year to 30 June, which was down to an impairment charge of £97 million. Office was also hit by the collapse of department store House of Fraser, which owed it £700,000.

EBITDA for the year fell 44% to £12.2m and retail sales decreased by 1% to £254m. However, online retail sales grew strongly by 10% to £94m and now make up 34% of total sales. Store sales were down 6%.

Mark admitted the timing of the Office acquisition, which was Truworths’ first foray outside of its home market, had been unfortunate. “We got our timing very wrong,” Mark admitted to analysts.

“We have closed three of the four problematical concessions and we hope to close loss-making stores – probably about 10 to 15 – over the next two years or so. Not many in the current year but the following year,” he also told them.