Discount footwear chain Shoe Zone said it has furloughed most of its 3,500 staff following the temporary closure of its 500 high street shops and big box stores.
The business said it had been forced to make the move following the national lockdown which is affecting all corners of the UK.
In all most of its staff had been temporarily let go, with 80 per cent of their wages being paid by the Government.
Its digital teams and key workers are still in post and its online business is still running.
The Leicester-based business is also trying to conserve cash, maintain a “satisfactory liquidity position” and protect its employees, by:
- Stopping all capital expenditure
- Working with HMRC to defer UK tax and VAT liabilities that arise during the lockdown
- Reclaiming £1 million of Corporation Tax payments on account from HMRC
- Seeking the maximum Rate Relief Grant available from the UK Government of £500,000
- Cutting all other costs and expenditure to the lowest level possible
Shoe Zone said a decision last month to cancel its final dividend for 2019 would save it £4 million as it works to keep cash within the business during the economic downturn.
In a statement, the business said: “The decision to defer and take steps to propose the cancellation of the 2019 final dividend is one of a number of measures which the company has implemented in order to conserve the company's cash balances with the aim of seeking to maintain the viability of the company's business during an expected sustained period of challenging trading as a result of the COVID-19 pandemic.”
Shareholders will be invited to vote on the cancellation of the dividend on April 29.
The business said it was also talking to its bank about a new, four year loan worth £10 million, to give it more liquidity.
But if that fell through, it said, it would have to make further cost saving measures and/or raise additional capital by early May – assuming the final dividend had been cancelled.
The statement said: “The board is continuing to closely monitor the group's performance and financial position in what is a rapidly changing trading environment and will provide updates as appropriate.”
