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Shoe Zone PLC (LON:SHOE) has parted company with its chief executive as it issued a profit warning due to the “tough high street”, which is counteracting its growth strategy.

The AIM-listed footwear retailer said it now expected its full-year performance to be “below its expectations” as a result of the difficult trading conditions, adding that its Big Box and Digital elements of its growth strategy were being offset by the slowdown despite “progressing strongly”.

READ: Shoe Zone shares tripped up as profits fall flat in first half

The company also has written down the value of its freehold property portfolio by £3.1mln to £5.3mln, which will result in a non-cash exceptional charge in its results for the year, although it stressed that this would have no effect on its dividend payment.

The group added that it “did not anticipate” the payment of a special dividend this year, having previously paid out £4mln to shareholders in its 2018 results.

CEO exits

Meanwhile, Shoe Zone said its chief executive, Nick Davis, has resigned from the board to pursue other business interests and would be leaving the group with immediate effect.

He will be replaced by executive chairman Anthony Smith, who would resume the role as CEO on a permanent basis.

“As has been widely publicised, the UK High Street is currently facing a challenging environment in which to operate”, Smith said, although added that the pressure on the retail market had enabled the company to achieve an average 23.5% reduction in rents on renewal.

However, the “tough” property market had also resulted in the property write down to its freehold portfolio.

House broker trims targets

In a note, analysts at Shoe Zone’s house broker finnCap cut their target price to 220p from 240p, however, they remained adamant that the company was still a “winning proposition” despite the short-term uncertainty in trading conditions.

“We believe that the strategy remains firmly on track, and the group has continued to deliver stable gross margins, tight cost control and strong focus on cash”, the broker said.

The comments did little to assuage investors, however, as the shares plunged 33% to 128.5p in early deals on Friday.

–Adds broker change and share price–