Shoe Zone warns full year results will be below expectations
Shoe Zone has warned that its full year performance is likely to fall below expectations.
In a statement, the company said trading has been challenging since it issued its interim results in May.
Whilst the company’s Big Box and digital channels have made good progress, its high street stores have suffered due to difficult trading conditions.
Shoe Zone has also announced that its chief executive Nick Davis has tendered his resignation and left the business to “pursue other business interests”.
He will be replaced by Shoe Zone chairman Anthony Smith who will resume his role as chief executive on a permanent basis. Charles Smith, Shoe Zone’s chief operating officer, will assume the role of executive chairman on an interim basis while Jonathan Fearn will continue as chief financial officer.
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.”
Shoe Zone has also announced that its board has undertaken a review of its freehold property valuations and has concluded that it will be writing down the value of its 17 freehold properties by £3.1 million to £5.3 million.
Smith added: “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 multichannel proposition.”
Image courtesy of Shoe Zone
