RCG posts "outstanding" results but puts Shoe Superstore into administration
RCG Corporation, the parent company of Athlete's Foot, has revealed what it describes as "outstanding" half-year results with a 13.8% rise in earnings to $6.78 million, but at the same time announced the collapse of its Shoe Superstore chain.
Shoe Superstore has been put into voluntary administration with Manfred Holzman and associates appointed yesterday.
The chain employs around 50 people and made a trading loss of $830,000 over the past year.
RCG Corporation chief executive Brett Hilton told SmartCompany he was very disappointed that, despite every effort, Shoe Superstore continued to trade below expectations.
"There has been a material deterioration in performance of the business because of a shift in consumer shopping habits away from strip locations," he says.
Hilton says there has also been ongoing reluctance of Shoe Superstore's core, mature consumer to spend on discretionary items.
"We just don't see this trend reversing in the foreseeable future; on that basis I don't see it as viable in the long term."
"The business is a loss-making business and was continuing to absorb a substantial amount of management time," he says.
Hilton says some stores will be closed and the administrator will seek expressions of interest for parts of the business.
He distanced Shoe Superstore's collapse from that of Payless Shoes last year.
"It is a totally different business from Payless Shoes; that was a low-cost brand and this is a premium offer to mature consumers, and it is strip shopping as opposed to shopping centres," he says.