A drive to open more out-of-town stores has failed to stop profits sliding at discount retailer Shoe Zone.
The Leicester-headquartered retailer opened 21 so-called Big Box stores last year, taking the total it now has to 45.
Between them they contributed £15.6 million to revenues of £162 million for the year to October 3.
Total revenues for the year were up less than 1 per cent though following what new chief executive Anthony Smith said had been a “difficult year” for the business with business rates going up despite fewer stores and lower sales.
He said Boris Johnson’s Government had to address high rates to protect high street stores.
He also said underlying pre-tax profits were down from £11.3 million to £9.6 million for the 53 week period.
Mr Smith took over as CEO at the business, which was built up by his father and uncle in the 1980s, following the abrupt departure of predecessor Nick Davis last August.
He said the business – which has 500 stores and has approximately 3,500 employees across the 海角视频 and the Republic of Ireland – has managed to bring costs down by renegotiating rents and cutting the length of some of its store leases.
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Preliminary results released today showed it rents were down by a quarter for 60 of its town centre stores, while the average lease length was now 2.1 years.
The business is now investing in some of its existing stores.
Mr Smith said digital sales were up 9.2 per cent to £10.6 million, particularly in the last six months – but said there was still money to be made in its town centre locations.
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He said: “Alongside the continued momentum in Big Box expansion and digital growth, town centre renewal is the third key focus for our refreshed strategy.
“Following a successful trial of four hybrid stores, in 2020 we plan to convert a further 20 of our traditional stores to this more premium town centre hybrid model.
“Town centre stores remain an important component of our proposition and we don’t agree with doomsayers referring to the inevitable “death of the high street”.
“However, it’s stark that over the past 10 years the rates paid as a proportion of our rent has increased from 26.4 per cent in 2009 to 54.3 per cent in 2019.
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“Despite rationalising our store estate, the value of rates paid has increased by £700,000 despite having 38 per cent fewer stores and 30 per cent lower sales.
“For the retail sector to continue to play its important role in the 海角视频 economy, and town centres to serve their communities, it is vital that Government recognises the impact of the increasing financial burden placed on businesses on the High Street by successive governments and their policies.
“Notwithstanding the broader sector challenges, I am delighted to be back running this market-leading business, knowing its potential to produce great results.
“The core business model remains robust and combined with the refreshed strategy of Big Box expansion, higher digital growth and town centre renewal, the board is confident that this enhanced strategic focus will improve customer experience, increase market share and drive shareholder returns.”