Footwear retailer Shoe Zone warns another 100 stores will be axed if business rates are not overhauled
- Shoe Zone boss Anthony Smith said it may have to shut down 100 stores
- Shoe Zone shut down about 300 stores in the last ten years
- Business rates payments rose from 26% to 54% over the last decade
- The retailer last month blamed business rate for a 15% fall in annual profits
Footwear retailer Shoe Zone has warned it may have to shut down a fifth of its stores, equating to around 100, if the Government does not reform business rates.
Shoe Zone has shut down about 300 stores in the last ten years, falling from 800 at its peak to around 500 at present.
Speaking to the BBC’s Wake Up to Money programme, Shoe Zone boss Anthony Smith said: ‘It’s a simple maths question. Every time a lease comes up, we’ll look at the mathematics of it. If we are not making any money out of it… the shop will unfortunately close.’
More store closures? Shoe Zone shut down about 300 stores in the last ten years
The Leicester-based company last month blamed business rate for a 15 per cent fall in profits to £9.8million in the last financial year to the end of October 2019.
Smith said that, although rents had fallen across its 500 shops, the amount it pays in business rates had increased from 26 per cent to 54 per cent over the last decade.
The rates system has been attacked by MPs and businesses amid fears it is putting shops under incredible strain, with some businesses spending more on rates than on rent.
Last week, more than 50 of Britain’s biggest shop chains sent a letter to the now expelled Chancellor Sajid Javid ahead of the Budget next month, calling for a shake-up of the business rate system.
The letter, whose 52 signatories include the bosses of Marks and Spencer, Sainsbury’s, Dixons Carphone and Greggs warned that the ‘burden of business rates has become unsustainable’.
The Leicester-based company last month blamed business rate for a 15% fall in profits
‘The business rates system is broken, and fundamental reform is needed,’
Retailers say a mechanism that allows businesses to move slowly to their new rates bill unfairly affects the High Street and areas outside London.
This is because ‘transitional relief’ staggers the speed at which those facing higher bills see their bills go up – and funds this by slowing down the speed at which bills fall for those who are due a reduction.
Last year was the High Street’s worst for 25 years, and 61 shops shut their doors for good every day.
Shoe Zone was founded in 1980 by brothers Michael and Christopher Smith as Bensonshoe in its current home city, Leicester. Their grandfather was himself involved in footwear manufacturing.
Chief executive Anthony Smith and interim executive chairman Charles Smith are sons of the founders, having joined the family firm in the 1990s.
Shoe Zone shares are up 2.2 per cent at 186.55p in afternoon trading on Monday.