Original Shoe Co, a British young fashion retailer that sells both shoes and clothing, is preparing to close an expanded bank deal that should enable it to speed up its store openings. The company currently has 51 stores, and it plans to use the extra funds to open another ten by the end of 2006, helping to raise its sales to an estimated £50 million (€72.9m-$88.0m) from a level of £36 million reached during the financial year ended last Oct. 31.
The company is negotiating a package worth about £10 million (€14.6m-$17.6m) with a new banking partner. While £7 million will replace existing credit facilities, an additional £3 million have been earmarked for the store openings. The new outlets will be fitted along the lines of a new concept that was inaugurated in Glasgow last year, and has since been duplicated in most of the chain’s existing stores. The new stores will be spread throughout the country, although the emphasis is likely to be on the southern part of England, since the chain is predominantly present in the North for the time being.
Original Shoe’s turnover was almost stagnant last year, due to the overall retail slump in the UK, compounded by clearance sales. It was stuck with inventories which it acquired as part of the takeover in February 2003 of 20 stores that previously belonged to Sports Connection, the failed Scottish sports retailer. Original Shoe has finished selling off the inventories. It has kept just 10 of the former Sports Connection stores.
The financial package will not entail any changes of ownership. Several investment funds jointly managed by Aberdeen Asset currently own 26 percent of the company. The controlling stake is in the hands of the Hammond family. David Hammond is still the company’s managing director, while his son Andrew works as a buying director.