Shoe Zone plc (LON:SHOE) is a well-capitalised, dividend-paying business and unsung success story says Gervais Williams, Co-Fund Manager of the Diverse Income Trust, in an exclusive interview with DirectorsTalk.
DirectorsTalk asked:
Turning to a strong performer in the retail sector, Shoe Zone plc (LON:SHOE) delivered a very positive and consistent set of annual results in January, and the CEO talks a lot about the hard work completed to reduce costs, streamline operations and accelerate investment. What’s your view on their strategy?
Gervais Williams of Diverse Income Trust commented:
I think Shoe Zone has really been an amazing investment.
It’s a tiny company, of course most people don’t really notice it in terms of the stock market, there’s so many other mainstream companies. What’s interesting about it is that it’s in a very competitive sector, shoe retailing, and specifically they’ve been in a very good place in terms of investing. They’ve invested in terms of range and the source. They could be very careful not to take long leases and they don’t outsource anything, they don’t even outsource their website or anything like that so they keep all the margin in-house. Because of that it’s a very profitable business, in spite of competition, in spite of a difficult couple of years in terms of retailing, they have actually done very well.
So, actually the share price is doing very well, the company is very well capitalised, it’s made good returns, it’s payed lots of dividends, I think it’s an unsung success story to be honest, albeit in a small size.
That’s why the investor return has been good irrespective of the sector being quite hard. I think it really just suggests just how closely the existing management team have managed the business and actually delivered success in a very very tough sector. So, very impressive is my summary of that one.
Shoe Zone is a leading UK specialist value footwear retailer with a portfolio of over 500 stores.
