The chief executive of Shoe Zone has walked out of the budget footwear retailer after it issued a profit warning on the back of poor trading and property writedowns.
Nick Davis tendered his resignation to “pursue other business interests”, leading to shares in the company falling by 31.3 per cent, or 60p, to 132p as investors reeled at the news.
Shoe Zone, which has 500 stores around the country and 3,500 staff, traces its roots back to 1917 when it traded as Benson Shoe. Michael Smith and his brother Christopher bought the business in 1980 and opened the first Shoe Zone store in 1996. A year later they handed over the retailer to Michael’s sons, Anthony and Charles, and the company listed on London’s junior market in 2014. It is valued at £63 million.
The retailer has until now shrugged off the worst of the retail gloom as its average selling price of £10 lured in cash-conscious shoppers. The company’s last profit warning was in 2015, which it blamed on poor sales of knee-high boots.
Mr Davis, 40, has been with the business for 16 years and chief executive for the past three. He has left with immediate effect and will receive a settlement of less than his annual salary of £212,500. Shoe Zone did not include a quote from him in the announcement about his departure.
Anthony Smith, 51, the executive chairman, will now resume his role as chief executive while Charles Smith, 53, will become the interim executive chairman.
Anthony Smith said the upshot of the distressed retail environment was that it had negotiated reducing its average rent bill by a quarter with landlords when leases came up for renewal. As a result, however, the company said that it had reviewed its portfolio of 17 freehold properties and written them down by £3.1 million to £5.3 million to reflect falling retail property values.
The number of empty shops hit a four-year high last month, with town centre vacancy rates reaching 10.3 per cent, according to the British Retail Consortium. Several big retailers, including BHS, Toys R Us and Maplin, have collapsed while New Look, Debenhams and Carpetright have shut stores using insolvency processes.