Shoe Zone CEO exits as trading proves tough
It’s not clear whether the two things are connected but on Friday, UK value retailer Shoe Zone delivered a trading update that said its full-year performance would be below expectations and it also announced its CEO’s departure “with immediate effect”.
The company said CEO Nick Davis, who’s been with the firm since 2003, had “tendered his resignation in order to leave Shoe Zone and pursue other business interests,” which could mean that he has another role lined up.
The company didn’t talk about succession plans either, although further down in its trading update, executive chairman Anthony Smith, a Shoe Zone veteran, was quoted as "chief executive", so we have to assume that he’s taken the helm, for now at least.
And that trading update itself? There were no actual figures. “Trading conditions since the group's interim results on 21 May have been challenging and as a result, the board now expects to deliver a full-year performance below its expectations,” it said.
On the plus side, it seems the ‘big box’ and digital elements of the group's strategy “are progressing strongly,” but “in the short term, their performance has been offset by the tough high street trading environment.”
Anthony Smith, as well as thanking Davis for his work at the company, didn’t comment further on the specifics of the firm’s performance. But he said the board has undertaken a review of its freehold property valuations and will be writing down the value of its 17 freehold properties by £3.1 million to £5.3 million. This will result in a non-cash exceptional charge in its full-year results for the year ending October 5.
“The UK High Street is currently facing a challenging environment in which to operate,” he said. “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.
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