Shoe retailer warns of 100 store closures
Shoe Zone has warned that it could be forced to close a fifth of its stores if business rates do not change. The retailer will close 100 of its UK stores unless the property tax is overhauled.
Boss Anthony Smith told the BBC: “If people want vibrant High Streets, they really do need retailers like us to keep our shops open in smaller towns.”
Retailers have called on HM Treasury to reform business rates in the Budget scheduled for next month.
Business rates are similar to council tax for business properties. They are paid by businesses, or landlords if a property is empty.
Mr Smith told Wake Up to Money that although rents had fallen across its 500 shops, the amount it pays in business rates had increased from 26% to 54% over the last 10 years.
Mr Smith said: “There is a lot of talk about the regeneration and repurposing of town centres, which we are all up for. But whatever goes into those shops, the rateable value is still simply too high.”
The rateable value is set by the government’s Valuation Office Agency. It determines how much a firm has to pay in business rates, based on the value of the property.
He added: “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.”
In 2019, the firm’s former chief executive Nick Davis stepped down, warning that profits would be lower than expected.
Anthony Smith was previously chief executive of the brand for 20 years, and last year took the role on again.
He told the BBC that the firm is closing about 20 stores each year, but pointed out that sales online and in out-of-town areas were “going well”.
High Street stores have recently been under pressure due to a squeeze on consumer spending and the rise of online shopping.
Major supermarkets, department stores and others recently called on the government to overhaul the business rates system, saying they place an unfair burden on shops.
However, it is not clear whether the Budget scheduled for 11 March will go ahead as planned following last week’s the resignation of former Chancellor Sajid Javid.