Shoe Zone has revealed that it plans to float next month in a deal that could value the footwear retailer at up to £100m. Retail Week takes a look at how the business operates and its plans for future growth.

The business today

  • Shoe Zone has been trading on the high street since 1996 and is one of the UK’s biggest UK specialist value footwear retailers, offering low price footwear targeted at the whole family.
  • It operates from 554 stores, with an average sales floor of 1,400 sq ft. It employs approximately 4,100 employees.
  • Shoe Zone sells over 20 million pairs of shoes per year. Last year the average retail price per pair of Shoe Zone shoes was £9.77.
  • Online sales jumped 27% in 2013. During the same period, mobile and tablet traffic accounted for 43% of all visits to its website.
  • The average transaction online last year was £18.45 - 57% higher than in-store.
  • Shoe Zone offers free delivery for all online orders and free returns to stores within 90 days of placing an order. Interestingly, the period for returns is due to be extended to 12 months from May 2014. The directors described these delivery and returns options as a “leading customer proposition” in the footwear market.
  • The vast majority of its products are sourced from China. It also sources from India, Turkey, Italy and Portugal.
  • Shoe Zone said it is able to offer low retail prices due to high volumes ordered, direct sourcing from factories and by maintaining a low product line count.
  • The executive and senior management team have an average length of service of 15 years with Shoe Zone. It is led by chief executive Anthony Smith.
  • The group reported pre-tax profit of £9.3m for the year to October 5 2013, up from £5.6m on the previous year. Sales grew to £193.9m during the same period, a rise from £189.4m in 2012.

The business tomorrow

  • The retailer revealed today that it plans to float on AIM and is seeking to raise £50m.
  • In preparation for the float, Shoe Zone has boosted its board with the hires of DFS chief executive Ian Filby as non-executive chairman and Hornby non-executive director Charlie Caminada as non-executive director.
  • Shoe Zone will offer institutional investors between 40% and 50% of the business. Numis is acting as its adviser and broker.
  • Post float it will explore international expansion, with Spain’s coastal regions and Poland earmarked as potential new markets.
  • The plan is to relocate smaller stores to larger ones and open five new stores each year and refit 50 stores each year.
  • New stores in less affluent areas which do not have Shoe Zone shops nearby will open at the rate of about five per year between 2014 and 2017.
  • There are plans in place to target a wider audience: the company says the increasing number of school age children in the UK creates an opportunity for its “Back to School” product ranges. It will also focus on deveping its comfort shoe ranges to cater for the UK’s increasingly ageing population.
  • Shoe Zone will offer an additional 200 web exclusive styles per season from spring 2014.
  • Following on from the launch of an online shop on Amazon last year, Shoe Zone plans to open shops on eBay and Play.com by the end of its 2014 financial year.
  • It will bolster its “Factory Outlet” departments from 15 stores to about 24 stores over the next 12 months.

 

At a glance: Shoe Zone today and its plans for future growth post IPO