Dolcis has gone, Stead & Simpson is up for sale - outsmarted by nimble newcomers who realised that consumers wanted what they had seen in Sex and the City. James Hall reports.
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When John Sears set up a small shoe manufacturing business in a Northampton workshop in 1891 he could have had no idea of the monster his business would become.
His humble enterprise went on to become the kernel of Sears, the vast conglomerate that encompassed ship building, the Selfridges department store, William Hill bookmakers and the Mappin & Webb jewellery chain. At its zenith in the 1980s, Sears's footwear division - the grandly titled British Shoe Corporation (BSC) - accounted for one in four pairs of shoes sold in Britain.
The BSC's Saxone, Freeman Hardy & Willis, Dolcis, Trueform and Manfield chains were staples of every British high street. Their combined 2,000 branches specialised in selling comfortable, sensible, fairly priced footwear to families from Newquay to Newcastle.
But Britain's mass-market footwear industry has been in slow decline for the past decade. Poor sales, rising costs and a flurry of fashionable upmarket entrants into the sector have started to threaten the very soul of some of these well-known chains.
And last week the sector hit crisis point.
On Monday, Dolcis, the 144-year-old store group, collapsed into administration, closing half of its shops and axing around 600 jobs.
Its rival Stead & Simpson, whose chains include Lilley & Skinner and Shoe Express, was put up for sale by its management last month following tough trading conditions, while Stylo, the owner of Barratts and Shellys, is reported to have held merger talks with rival C&J Clark.
So is this the death of the high street shoe chain as we know it?
Chains such as Dolcis and Shoe Express have been caught in a mid-market squeeze. Supermarkets, sports shops and clothing retailers such as New Look now sell vast amounts of cheap, fashionable footwear, something they did not do a decade ago. Of the top 10 shoe retailers in the country by market share last year only three were specialist footwear chains.
Sir Tom Hunter, the Scottish entrepreneur who bought Office, the niche upmarket shoe chain, in 2003, says the entrance of non-specialists into the sector has had a dramatic effect on traditional players.
"What has happened is that the general fashion retailers have expanded into footwear and some have done it extremely well. At the bottom end you've got Primark and New Look - who went into footwear extremely aggressively - and the shoe chains who were at that level and hadn't innovated have been swallowed up," he says.
At the same time upmarket brands such as Jimmy Choo and Christian Louboutin and high end chains such as Kurt Geiger have entered the mainstream consciousness and are poaching sales from traditional chains.
But a pincer movement from above and below is not their only woe. Rising raw material costs and punitive EU anti-dumping tariffs on leather shoes from China and Vietnam are exacerbating the mass-market retailers' problems.
Sales figures make depressing reading. Of Britain's top 10 footwear specialists, eight either saw margins fall or made a loss in 2006, according to Verdict Research. Their market share has declined too. These chains accounted for more than half of all footwear sales in Britain in 2001, a figure that has fallen to under 42 per cent today, Verdict says.
What makes this decline more startling is that Britons' appetite for shoe buying is growing. According to Verdict the footwear market in this country grew by 4.6 per cent in 2007 to reach £5.5bn, its fastest rate of growth since 2003. However, very few of these extra sales are going to the mass-market outlets.
Last September Michael Ziff, the chairman and chief executive of Stylo, the only listed shoe retailer left, reported a £7.5m loss for the six months to August. This followed a £7.7m loss the year before. Ziff's explanation of the poor performance summed up the myriad issues facing his sector.
"The poor performance of the group is a reflection of a number of factors, including an exceptionally difficult and competitive shoe market with low barriers to entry, increasing costs such as rents, rates, minimum wage and power costs, increases in interest rates and unseasonal weather," he said at the time.
Many old-school shoe retailers have tried to expand their way out of trouble, a strategy that has backfired. "Specialists have fought against the growing competition by opening new stores to fuel sales growth but, with profitability in the sector sliding, this is compounding their problems," says Carol Ratcliffe of Verdict.
The result is that far too many mid-market shoe shops are chasing a declining number of sales. The overcapacity sis one of the key reasons Dolcis had to call in KPMG as administrator last week, analysts believe.
Fashion experts say the mass market's main problem is lack of trendiness. For years mainstream shoe chains were the only option for shoppers. But falling prices and growing availability of luxury brands, combined with raised awareness driven by celebrities such as Sarah Jessica Parker of Sex and the City fame - have broadened the choices available.
Tamasin Doe, a fashion writer, says the geography-teacher-style loafers and sensible brogues offered by mainstream chains no longer cut the mustard.
"Just as clothes on the high street very closely resemble designer versions, shoes have gone the same way. People expect so much more. Now everyone knows about Jimmy Choo.
"The pressure is on the mass market. Dolcis makes me think of racks of so-so footwear and that doesn't cut it any more. Chains like Kurt Geiger have a huge range of fashionable designer styles. The bar has been raised," she says.
Hunter says the likes of Dolcis have suffered because they are seen as dowdy stores selling commodities not fashionable shoes. "With Office we decided to build the brand, whereas I don't think that Barratts or Dolcis is a brand. It is just another shoe shop, it is very dull," he says.
Key to Office's success, he says, is its deliberate pricing above the mass market. "If you are £5 more expensive than New Look you look expensive. But if you are £20 more expensive - and higher quality - you look luxury," says Hunter.
Some store bosses say the death of mainstream shoe retailing is a load of old cobblers. Meanwhile retail historians say their steady decline can be traced directly back to the British Shoe Corporation failing to innovate in the late 1980s (the retail behemoth was broken up in 1996).
"The decline of the British Shoe Corporation is one of the biggest cock-ups in UK retail," says Robert Clark, an analyst at Retail Knowledge Bank. "The company completely failed to invest in its stores and see that the market was changing. They reduced shoe retailing to a bland commodity."