Shoe Zone boss Anthony Smith said the “retail friendly” property market had helped it maximise profits as it eyes relocations to larger, more prime sites.
Smith, who floated the business in May, said its traditional store size was around 1,250 sq ft but it was now opening stores 1,650 sq ft to 2,000 sq ft that “perform better”
He said it was moving into locations that were “very, very close” to prime. “We’ve never been able to do that. It’s making a big difference to turnover and footfall,” he said.
Smith said that Shoe Zone, which reported a half year profits surge from £200,000 to £2.7m in the six months to April 5, had benefitted from the flexibility in its rental terms which has allowed it to relocate easily.
He said: “We’ve spent 10 years working in an American-style model. We don’t sign 10 year leases. Our average lease length is three and a half years.
“We’ve planned it to have the flexibility to move locations. There are far, far fewer loss makers in the portfolio.”
Shoe Zone has also been boosted by its increased use of direct sourcing, which has improved both margins and kept its prices low.
Smith said: “It’s helping us drive down retail prices to make us - well we’ve always been extremely competitive - but to keep us on the front foot.”
Four years ago around 10% to 12% of its products were sourced directly compared to 58% now, said Smith.
It is aiming for two thirds of its merchandise to be sourced this way, which he said would happen over the next four seasons.
Smith insisted that the value footwear sector was a “great place to be”. “You want to be us or Russell and Bromley. You don’t want to be in the middle. People are trading down. Customers are being more savvy with their money and that’s likely to continue,” he said.
However, despite the profits surge, sales for the six months ending April 5 slipped to £82.9m from £98.9m, reflecting the planned closure of a number of temporary stores, Shoe Zone said.
Smith said it agreed to take on premises on a short term basis when it shuttered its Stead and Simpson chain. It traded the sites under the Shoe Zone banner until landlords found a tenant to take the space.
Shoe Zone profits rocket but sales slide in maiden interim results
- Currently reading
Shoe Zone aims to benefit from 'retail friendly' property market with 'more prime' sites