Footwear retailer Shoe Zone has reduced rents at lease renewal by 30.9% in the year to 3 October, amid plans to close 50 more stores.
The reduction compares with a 23.1% fall in the previous year. Shoe Zone said the latest negotiations had resulted in a £777,000 cost saving for the business. Its average lease length is two years.
Shoe Zone, which ended the period operating from 460 stores in the UK, said it planned to relocate a further 10 stores this year. The majority of its stores are leased.
When its stores reopen from lockdown, it expects to have 427 stores, 367 of which are town centre locations. A further 52 will operate in its “big-box” format, with a further nine being “hybrid” stores.
During the year the retailer opened two more hybrid stores, taking the total to six. Shoe Zone said it would focus more on this format as its “strategy for town centre renewal” and profitability over the next five years.
The retailer went into the red for the first time during the year after making a pretax loss of £14.6m, on a 24.3% revenue decline to £122.6m.
A £2.3m non-cash adjustment was made after freehold property values fell during 2020, resulting in a loss per share of 23.7p, compared with earnings per share of 11.4p in the previous year.
Anthony Smith, chief executive, said: “In my second year back as chief executive, it is disappointing I am reporting on a year impacted by Covid-19. Despite this, there are positives, such as the continued growth of digital and the commitment and focus of our loyal employees.
“The financial pressure caused by Covid-19 has meant we now have debt on the balance sheet for the first time in over 15 years.”
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