Shoe Zone defers dividend payment to save cash
UK fashion retail is currently under siege and for many businesses, a focus on survival strategies is key. With that in mind, budget footwear retailer Shoe Zone said on Tuesday that it's deferring its dividend payment to keep as much cash in the business as it can.
The board said that “following consultation with its advisers, it is taking the prudent decision to defer the payment of the 8p per share 2019 final dividend that was approved at the company's annual general meeting held on 5 March”. And in addition to that, it expects that when it provides a half-year trading update on April 28, the board will convene a general meeting to take place during May “at which a resolution will be proposed to cancel the 2019 final dividend”.
Given that shareholder dividends are a key focus for those institutions and individuals that invest in listed companies, cancelling the dividend is a big step. But in times of crisis, it’s also a necessary one.
“In recent days we have seen a reduction in footfall, across our estate, and whilst the full extent of the coronavirus on the short and medium-term retail environment is not yet clear, it is becoming ever more apparent that it will create significant disruption to people's lives and shopping habits in the coming months,” the company said.
“The decision to defer and take steps to propose the cancellation of the 2019 final dividend has been taken with the unanimous backing of the Board and is one of number of appropriate measures being implemented to conserve the company's cash balances and ensure the robustness of the business to protect it from a sustained period of challenging trading.”
Shoe zone has been under heavy pressure in recent periods and while its big-box out-of-town stores have proved a major success for the company, its more numerous town-centre locations have been battling declining footfall for some time. This was happening even before the current coronavirus-linked problems began.
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