Shoe Zone CEO quits as it warns on profits
Shoe Zone CEO Nick Davis has quit the business with immediate effect as the value footwear retailer announces its full-year performance will be below expectations.
The company announced that while its Big Box and digital channels had been "progressing strongly", the group's trading had been dragged down by tough conditions on the high street since it announced its interim results in May.
In addition it said it had undertaken a review of its property portfolio and had written down the value of 17 freehold properties by £3.1m to £5.3m. This, it said, would result in a non-cash exceptional charge in its full year results for the year ending 5 October 2019.
As a result of the departure of Davis, who had been promoted from CFO to CEO in 2016, Anthony Smith, executive chairman, will resume his role as chief executive on a permanent basis. Charles Smith, chief operating officer, will assume the role of interim executive chairman and Jonathan Fearn will continue as chief financial officer.
Anthony Smith said: "I would like to take this opportunity, on behalf of the board, to thank Nick for all of his work since he joined the business in 2003. Nick was instrumental in getting Shoe Zone ready for the public markets in May 2014 and was promoted from CFO to CEO in June 2016. The Board wishes him well in his future endeavours.
"As has been widely publicised, the UK High Street is currently facing a challenging environment in which to operate. The pressure on the retail property market has enabled Shoe Zone to achieve an average 23.5% fall in rents on renewal and average outstanding lease length of only two years. As a consequence of this and the tough freehold property market, our freehold assets had to be revalued to represent fair value and give us future flexibility.
"While we therefore face a short-term impact on our balance sheet, we do not anticipate any change to our dividend policy, reflecting our confidence and excitement in the long-term growth opportunities through the Big Box roll-out, continued operational improvements and our multi-channel proposition."
Shoe Zone is the UK's largest value footwear chain and operates from a portfolio of around 500 stores and employs approximately 3,500 employees across the UK and the Republic of Ireland.
The store portfolio consists of over 450 high street stores containing the core Shoe Zone product range and over 40 larger out of town retail units which also feature brands such as Clarks, Skechers and Hush Puppies.
It sells around 18 million pairs of shoes a month will an average selling price of £10. It is able to offer value prices due to high volumes ordered, direct sourcing from factories and a low product line count.