Schuh boss confident footwear retailer won’t get the boot as activist circles
Schuh is owned by Genesco which bought the Scotland-headquartered business for £100 million in 2011.
The chief executive of footwear retailer Schuh has dismissed the prospect of the company being sold off, despite its US parent facing pressure from an activist investor to offload the business.
Boss Colin Temple told the Press Association he was confident in the footwear chain’s performance and that the retailer will continue to prosper under the ownership of Genesco, which bought the firm for £100 million in 2011.
“I’m not sat here and nervous that we will be put up for sale in the foreseeable future,” he said.
“I am intrigued about what will happen with the activist investor but I’m confident that it makes sense to be part of the organisation.”
Mr Temple, who was speaking on the sidelines of the Retail Week Live conference, said the retailer has benefited from “being part of the wider group” and that “if the activist investors were able to understand that, it might help”.
The comments come after Legion Partners wrote to Genesco last week, saying that the UK footwear chain was among the businesses that stood to improve under “separate ownership”.
It added that it was “unacceptable” for Genesco to continue operating with a “disparate set of assets with such a poor record of value creation”.
Mr Temple said: “There is value in our business product and processes and that’s not going to change.”
Schuh – which has 105 stores across the UK and is headquartered in Livingston, Scotland – has yet to report its 2017 results, though a year earlier it reported a 5% rise in turnover to £280.9 million for the 12 months to January 2017.
This helped pump up underlying earnings 15% to £29.7 million over the same period, according to filings at Companies House.
Mr Temple said the shoe chain – which also has stores in the Republic of Ireland and Germany – has been competing for shoppers’ pounds not only with fellow footwear retailers but restaurants and entertainment venues as consumers tighten up their spending on non-essential items amid rising inflation sparked by the collapse of the pound.
Genesco warned last year that Brexit “could impact consumer demand, currency rates and supply chain” adding that there could be “no assurance” that Schuh’s performance would not not be “adversely affected” by economic conditions.
“The other thing that’s kind of changed quite a lot of us and did actually materially affect us was the weather. We didn’t have a great boot season last winter… and we were nervous around Black Friday that we wouldn’t be able to sell the kind of winterised product – the product that we didn’t want to carry over into February.”
Schuh put a lot of effort into its Black Friday promotion, which caught the eye of shoppers, “but because we were discounting so much, there was a little bit of a vacuum between Black Friday and Christmas,” Mr Temple said.
“So it was challenging for us in terms of where we are in terms of the fashion cycle and the weather didn’t help.”
But the Schuh boss does not expect his company to face the same fate as retailers like New Look who have been forced to shutter a raft of stores, or Maplin and ToysRUs which have collapsed into administration amid growing competition and economic pressure.
“Our profitability has gone down a little bit over the years but we’re still profitable and that means that we’re not forced to close stores…I don’t see right at this moment the need to be taking a knife to our store portfolio.
“And what I’m saying is that things are changing out there and we might need to change the way in which we determine where our stores are and have a very, very accurate feel for how our bricks and clicks make profits in harmony.”