One of the country's oldest shoe shops was put up for sale yesterday in a move that will reap multi-million pound windfalls for its three directors.
Stead & Simpson, the UK's third biggest shoe retailer, is seeking buyers after its biggest shareholder, Development Securities, announced plans to offload its 39 per cent stake. A deal could value the business at £100m. The Leicester-based group, founded in 1834, has appointed bankers to conduct a strategic review, which could lead to a sale or flotation.
The decision to appoint Clearwater Corporate Finance was announced alongside a strong set of full-year results that showed Stead & Simpson was bucking the retail gloom. The company, which owns the Shoe Express, Lilley & Skinner and Famous Footwear chain, said profits before tax for the year to 1 January almost doubled to £8.9m from £4.6m on sales up 8 per cent to £140.3m.
John Shannon, the chairman, said: "We think the most likely outcome is a sale to a private equity firm, given their current appetite for retail stocks." David Lockyer, the chief executive, Peter Foot, the managing director, and Mr Shannon together own 57 per cent of Stead & Simpson after they bought out Apax, its previous private equity backer, in January last year.
Development Securities, a property development firm that owns a number of shopping centres, said the decision to sell its stake in Stead & Simpson was in keeping with its "stated strategy of an orderly exit from this business in the medium term". It acquired the retailer in the mid-1980s and sold a majority stake to Apax in 1993. Mr Shannon, who used to run Country Casuals before it was acquired by Austin Reed, said like-for-like sales had risen by 6 per cent during January and February, substantially ahead of the market. "If we can continue to perform in a softer market it shows how resilient footwear is," he said.
Stead & Simpson started as a footwear maker but switched to focus on shoe shops in the 1960s. It has more than 400 retail outlets, behind Clarks, the market leader, and Stylo, which owns Barratts and Shelleys.
Mr Lockyer said the sale or flotation would "allow the company to examine options to fund our expansion as we cross the threshold into the next stage of significant growth". He said the jump in profits was down to "a combination of refitted stores and the ability to offer our customers an increasingly wide choice of fashion and brands".
Stead & Simpson employs about 4,000 staff, including 150 at its head office in Syston.
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