Britain’s beleaguered high street has been dealt a fresh blow after the owner of shoe retailer Stead & Simpson said it will close 90 stores, including seven in Scotland, following a “thorough review” of the loss-making business.
Parent company Shoe Zone, which bought Stead & Simpson almost five years ago, said it had been forced to shut unprofitable branches to protect the future of the business, which began life as a Leeds leather merchant in 1834.
Continued pressure on customer spending, along with fierce competition from discount retailers and the growing popularity of online shopping, has seen a number of recent high street casualties, including Clinton Cards, Comet and JJB Sports.
Naomi Shefford, marketing and property director at Shoe Zone, said: “We have undertaken a thorough review of the Stead & Simpson business over the last few months which has culminated in the winding up of Tyler Ltd, the company that Stead & Simpson stores trade under.
“We want to emphasise that this review has not affected Shoe Zone in any way at all, and has in fact further strengthened this business.”
According to accounts filed with Companies House, Leicester-based Tyler made a pre-tax loss of £704,000 in the year to 1 January 2011, the latest period for which figures are available. Turnover fell to £53.5 million, from £59.3m the previous year, amid “difficult” trading conditions, although the directors had expressed hopes that the firm’s performance would improve.
The firm ended the financial year with 230 Stead & Simpson stores, employing about 1,400 people. A spokeswoman was unable to say how many jobs could be lost as a result of the closures.
Shefford said: “The decision was not taken lightly to close these stores.
“However, in locations where we have two stores on the same high street, or where stores were not profitable for us, we had to make a business decision to ensure the company continues to be successful.
“Our staff are our number one priority and we appreciate the store closures have not been easy for them. However, where we have a Shoe Zone or another Stead & Simpson store near to any closures, we are doing everything we can to ensure our staff keep their jobs within the business.”
Stead & Simpson enjoyed rapid expansion in its early years and by 1889 it had 100 retail outlets, growing to 215 by 1969. The firm produced millions of boots for the British Army during the Second World War, but ceased manufacturing in 1973 to focus solely on retailing.
The firm floated in 1981 and changed hands several times, growing its estate to more than 400 stores by 1999, before Bank of Scotland backed a £50m management buyout of the business in 2005. However, the chain went into administration three years later, when it was acquired by its current owner.
The Shoe Zone group made a pre-tax profit of £9.9m in the year to January 2011, down from £15.3m the previous year, but Shefford said profits are expected to improve “now that the business can focus on the remaining stores and our increasingly successful websites”.
• Eight out of ten landlords have lost money as a result of retailers going bust in the past 12 months, according to research from Creditsafe.
The credit checking firm also said 62 per cent of firms leasing out retail units have seen an increase in late or defaulted payments from tenants.