New owner of Schuh steps up plan to double number of shops

THE new American owners of Scottish firm Schuh will bankroll an accelerated expansion of the chain, which they hope will mirror the success of their last major acquisition.

The Livingston-based firm is expected to grow at twice the rate previously planned by management, doubling its 59 stores in about six years, following its 125 million takeover by US retailer Genesco.

Genesco's chairman and chief executive, Bob Dennis, last week paid his first visit to Schuh since buying the business in June in a move that triggered a massive payout to staff.

Dennis was chief executive of Hat World when it was taken over in 2004. Rebranded as Lids, the company has since been a powerful engine of growth for Genesco, propelling Dennis to the top of the parent company while its turnover jumped from around $250m (155m) to $600m.

He said the same kind of trajectory is envisioned for Schuh, although he is adamant that the business' existing management team in Scotland will set the pace.

"When we make these acquisitions we try to provide the capital and the platform to grow," he said.

Dennis and Genesco's retail president Jim Estepa appear to have built a rapport with Schuh's management, who they had been wooing since before Christmas, and managing director Colin Temple refers to them as "the bank of mum and dad".

The new owners' wealth means the expansion rate Temple had planned for Schuh can be doubled, from opening four or five stores a year to launching up to ten. He says there is space for between 50 and 60 more stores in the UK.

It is that spare capacity in the marketplace that attracted Genesco to the UK in the first place. Estepa said the US footwear market is "mature", and with more than 1,000 outlets under its Journeys brand covering every US state, the company needed to look abroad for meaningful growth in shoe sales.

Genesco was considering an organic move into Europe when Dennis and Estepa met Temple and decided Schuh would be a perfect fit for their business.

They would not be drawn on their plans to launch on the continent, insisting that they want to establish their foothold in Britain first.

However, they don't deny that Europe is a target - the question is whether they choose to tackle it with Schuh or Journeys. That may depend on the performance of the Scottish business over the next few years.

n Last week Schuh lost its legal case to prevent another Scottish shoe seller launching a mini-chain called Shhh.

Schuh's lawyers accelerated their challenge on Dumfries-based businessman Steven Moffat to try to prevent him opening his first store using the name in August, saying it was too similar. But Moffatt, who says his high fashion boutique caters to a different market and there was no possibility of confusion between the brands, defeated the challenge at the Court of Session in Edinburgh.

A spokeswoman for Schuh said the matter was over and wished Moffatt well with his business.