Management buyout at Cosyfeet

Foot Shop Ltd, the company behind the Cosyfeet and Walktall brands, has undergone a management buyout for an undisclosed sum. David Price, owner and founder of the business has sold the company to members of Foot Shop’s executive board, including Andrew Peirce, managing director; Jackie Bemmer, finance director; Jim Lockyer, Walktall brand director and web director, and Nick Brine, operations director.
The deal, which was concluded on 1st June, did not include Foot Shop’s full-service agency, the Full English, which has been absorbed into another business separate to Foot Shop.

The new owners do not predict major changes in the direction of the business, and state that the company will continue to operate as before from its base in the village of Street, in Somerset. Since 2010, however, the business has already undergone a major refocusing. In August 2010, Foot Shop closed its footwear website Lookatmycrazyshoes.com, which specialised in selling Crocs. “It was a sensible decision,” says managing director Andrew Peirce.  With Lookatmycrazyshoes, he explains, the company was operating in a market that had become saturated quickly. “There were lots of other companies selling the same product, price was a given [dictated by the brand owner] so we were competing on marketing. For a relatively low margin product, it was heavy on time.”

Foot Shop is best known for its flagship Cosyfeet title, selling extra-roomy footwear for people with swollen or bandaged feet and ankles. Its products also include a range of own-brand specialist socks, hosiery and foot-care products. As part of the initiative to focus on the core offering, Foot Shop stopped producing Hip to Toe, its catalogue for hosiery and “non-shoe” items. Now, to avoid diluting the brand, there’s just one Cosyfeet title, with customers receiving different editions, including hosiery. “It’s a means of keeping in contact with our best customers without them having to flick through 144 pages of shoes every time they receive a catalogue,” says Peirce. At Cosyfeet, the catalogue remains very important to the business, but Foot Shop is seeing more and more orders placed online, with the web “our biggest area of growth,” says Peirce, who has set an ultimate target of achieving 40 percent of sales online.

Cosyfeet also has a thriving wholesale business, with mobility stores, for example, stocking Cosyfeet footwear. It produces a healthcare professional catalogue too, for doctors, nurses and other medical professionals to distribute at their surgeries and clinics. A minority of healthcare professionals also have their own retail offering, selling Cosyfeet products to their patients. In terms of brand values, says Peirce, “the recommended route is very important to us,” and Cosyfeet is keen to maintain an active link in this area.

Foot Shop’s other brand Walktall, specialising in men’s shoes in sizes 12 to 19, is also doing well, having doubled in size over the last three years. When Foot Shop acquired Walktall in 2005, the brand had a catalogue and website. After finding difficulties producing a catalogue due to problems securing enough stock, Foot Shop moved away from print to web. More recently, says Peirce, Walktall has made a return to mailings, keeping in touch with its customers through flyers to drive online activity.

Best foot forward
Although Foot Shop Ltd has seen steady growth in the last three years, Peirce is cautious about the outlook, acutely aware that even the usually resilient grey market is susceptible to economic downturns. In 2010, the business recorded a turnover of £13 million, and Peirce expects a similar figure this year. Profit in 2010 improved significantly on 2009; excluding impairments and one-off costs associated with the closure of Lookatmycrazyshoes, Peirce says that profit doubled. For 2011, he’s expecting a modest profit increase. He says that the company’s diversification in recent years may have slightly hurt profit growth, as the “development of other brands costs a lot of time and money”.

Now the plan is firmly to grow core business, with Foot Shop particularly looking to invest in the fulfilment process, and improving and growing the product mix. 
The new owners will also tackle improvements in wholesale, through building key accounts and strengthening Cosyfeet’s brand presence. “Our shop in Street has £500,000 turnover so people clearly like to try things on,” explains Peirce. “For those customers who don’t shop through mail order we have to improve and enhance our wholesale presence.”

Other initiatives include further developing Walktall into a recognisable name, and as such the company has moved into own-label goods, starting with plimsolls and boat shoes.