At a time when Covid-19 has floored a string of big names in retail, shoe chain Kurt Geiger is defiantly opening new bricks-and- mortar stores.
‘We are firm believers in the High Street and we are putting our money where our mouth is,’ says chief executive Neil Clifford.
Kurt Geiger, which owns the Carvela and Shoeaholics brands, has reopened all its UK shops after the lifting of the most recent lockdown, along with nine new ones.
Geiger counting on a High Street comeback: Shoe chain boss Neil Clifford is convinced people will return en masse once lockdowns are fully lifted
They include a Shoeaholics branch in Westfield in London’s White City, which is the largest shoe shop in the UK, along with a Carvela store launch in Manchester’s Trafford centre.
The new stores will create around 50 jobs. Clifford is keen to re-employ some staff in Debenhams concessions who lost their jobs when the department store went under.
‘We lost over 700 people in the last 18 months mainly due to the collapse of Debenhams,’ he says.
It may seem counter-intuitive considering how the pandemic has devastated traditional retailers and driven sales online – and even more so given Kurt Geiger is owned by private equity, which has been linked to a string of collapses in the sector.
But Clifford, 54, is convinced people will return en masse once lockdowns are fully lifted, because Britons love shopping – and adore their shoes, whether it is stilettos, trainers, slingbacks, sliders, espadrilles or courts.
‘Did you know the average person in the UK has between 30 and 50 pairs of shoes?’ he asks.
He joined Kurt Geiger, then owned by the Fayed family, in 1995. The chain was established in 1963 on London’s Bond Street – ‘Yes, there was a real man called Kurt Geiger,’ he explains.
Today, it stands out as a private equity-owned company that is expanding and creating jobs in retail, at a time when many of the High Street casualties, including Debenhams, have been blamed on the buyout barons.
KurT Geiger is majority-owned by private equity firm Cinven, which has a 79 per cent stake. Clifford and the rest of the management own 21 per cent.
‘Cinven has been fantastic and super-supportive, as has Lloyds Bank,’ says Clifford.
His personal approach during the pandemic, when he gave up his £500,000-a-year pay packet and embarked on a huge giveaway of footwear to NHS staff, was also at odds with the stereotype of private equity-owned businesses as hard-nosed and ruthless.
‘I am being paid again now our shops have reopened,’ he says.
It helped that Kurt Geiger went into the crisis from a position of strength.
Pre-pandemic, annual sales were up 3.7 per cent to £347million and pre-tax profits rose to just under £36million from £30million.
He also set up the scheme to give away shoes to health service workers after his niece, Kerry Morrison, who works as a speciality nurse at the Queen Alexandra hospital in Portsmouth, said that it would be nice for them to have free footwear.
Expanding: Kurt Geiger, which owns the Carvela and Shoeaholics brands, has reopened all its UK shops after the lifting of the most recent lockdown, along with nine new ones
‘There were big debates about whether we could afford to do it, but in a way we couldn’t afford not to. People will remember how businesses behaved.’
Having been a retailer all his adult life, Clifford has an old-school faith in the resilience of the great British shopper.
He left school in the 1980s with one O-level, in art, and started work on a youth training scheme in Debenhams in Portsmouth, so feels an emotional tug about the demise of the much-loved chain.
‘Despite all the problems I absolutely believe in the High Street. I’m from an age of stores and age of analogue. I was a store manager so it is in my blood. I think shopping is our national religion.’
To Clifford, the pandemic spells opportunity, as it did after the banking crisis more than a decade ago.
‘Downturns are a chance to do major store openings and this is what we have done in the past. Our biggest growth was after the financial crisis when we opened almost 30 stores,’ he says.
Traditional shops and digital sales are not mutually exclusive, but complement one another.
‘When we open a store we do a lot more business online in that locality. Of course, you have to open in the right places, which is the million dollar question.
‘We opened a store in Cardiff 18 months ago and our digital business there is up 60 per cent.’
The average person in the UK has between 30 and 50 pairs of shoes
Clifford says that there has been a shift towards big shopping centres where there is cheap and easy car parking, as people are still avoiding public transport.
‘Easy-access centres are performing twice as well as normal high streets,’ he says. ‘The shift to big regional shopping centres has been going on a while but since Covid it has been magnified.’
Similarly, the trend towards online has gathered pace. ‘We are selling double the amount on KG.com than in the 56 Kurt Geiger stores,’ he says.
Clifford has negotiated new rent agreements with most of the chain’s landlords, and says drily: ‘I think they understand they have to share our profits as opposed to take all of our profits.’
He is also, he says, taking a gamble on the Government reforming business rates, which are a major burden.
‘We only had one loss-making store, in Covent Garden. When we took it on, in 2008-9, it was £250,000 in rent. By the time we closed it in January the rent was £500,000 and on top of that another £500,000 in business rates.
‘We are betting on Rishi to deal with business rates. We believe there will be a change in a year or two – we hope so.
‘You can get premises on Oxford Street and Regent Street for rent that is lower than the rates. It is crazy, around £450,000 of rates for a shoe shop.’
In lockdown, people initially bought slippers but women are now slipping their feet into higher heels.
He says: ‘We are crazy-busy designing new heels. Ten years ago 70 per cent of shoes sold were heels. It dropped to 3 per cent in lockdown but now it is back at 15 per cent.’
Rather as hemlines are said to reflect the fortunes of the economy, heel-wearing is a sign of confidence in the return of normality.
‘Economically, we are going to bounce back really fast, we will all be moaning about inflation in a year’s time. I am incredibly optimistic now about the future.’
Clifford is determined to put his best foot forward. If he succeeds, he will have proved to the sceptics that the High Street has a vibrant future and that private equity ownership needn’t mean throwing a business to the wolves.
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