Short leases offer Shoe Zone opportunity to flex

Retailer Shoe Zone is planning to take advantage of its short lease lengths and an oversupply of stores to improve its property portfolio. Delivering its results for the full year this morning, the retailer said the average lease length across its portfolio was now just 2.5 years, which it said gave it the “opportunity and flexibility” to respond to changes in any retail location at short notice. Chairman Charles Smith said: “Property supply continues to outstrip demand and we expect to take advantage of this environment and significantly improve our property portfolio over the medium term.” At 28 September 2024, the retailer had 297 stores, down from 323 a year earlier. The portfolio comprises 185 new format, larger stores and 112 original stores. Over the period it relocated 27 stores, refitted 28 and closed 53. The decline in store numbers saw revenue fall by 2.7% to £161.3m, said the group. It added that it had spent £11.5m on refits and relocations but that this had been partly offset by £1.4m of rent-free periods given by landlords. The retailer also achieved a rent reduction of £400,000 across 35 stores, reflecting an average reduction of 21%. Shoe Zone said it largely expected its store refit and relocation programme to complete in 2025 and expected to relocate or open 17 stores and refit nine. The retailer has a target portfolio size of around 280 by the end of 2026/7 with all “original” stores having been refitted, relocated or closed.