Kurt Geiger is to close stores and focus on international expansion amid spiralling costs in the UK.
The shoe retailer’s chief executive Neil Clifford said high business rates and rents are “killing UK retail” and that the retailer is “incredibly cautious” about expansion in the UK.
Kurt Geiger said in 2010 that it would open another 40 stores in five years. It has since opened 17 to bring its portfolio to 60, but Clifford said 50 to 55 stores would “be enough forever”, The Telegraph reported.
Clifford said: “For our company, I think 50 to 55 stores will probably be enough forever. It’s going to be a long hard slog in the UK.
“We’ve probably got up to five shops too many outside London. I think we will close them over the next few years.”
The retailer, which also has 200 concessions in department stores, will now set its sights on overseas expansion, with Germany and the US the main targets.
Kurt Geiger has 25 stores in France, Israel, the Middle East, Russia and Turkey. Clifford has set a target of 15 stores in Germany over the next 18 months and 10 to 15 in the US by 2015.
The retailer also plans to launch in Hong Kong, Macau, Shanghai and Beijing next year. It also has a target of 10 to 15 US stores by 2015.
Clifford hit out at landlords and business rates. He said: “At our store in the Metro Centre in Newcastle, we pay £160,000 a year in business rates on one 2,000 sq ft shop. It basically makes the store completely unviable.
“How the hell can the council justify that? For a comparable store in the US and Germany, we would pay local taxes of just £10,000. When we sit down and explain this to our American owners, they say, ‘What are you getting for this £160,000?’ and we actually have no idea.”
He added: “Business rates are what are killing UK retail, probably more than rents. Northern UK cities generally are a lot higher and can be as much as double some of the markets in the South.”