Shoe Rack to seek investment after appointment of examiner

Shoe Rack plans to seek fresh investment after the appointment of an examiner to the footwear chain.

The High Court appointed accountant Anthony Weldon of Kieran Ryan & Co as examiner following a petition from its directors earlier this month.

Shoe Rack employs 70 people and operates 10 stores under its own brand and three concessions. It recently closed outlets in Cork and Dublin.

The chain has been struggling with a number of leases, dating back to the property bubble, where rents are above current market levels and which are governed by“upward-only reviews”.

The examiner is expected to seek fresh investment that will form part of a rescue plan – known formally as a scheme of arrangement – for the business.

Shoe Rack's managing director Mark Buckley said yesterday that its management is "very confident that it can come out of the examinership without losing jobs".

Mr Buckley and members of his family own the chain, which has been trading for 22 years and has outlets in most key urban centres in the Republic.

Recently lodged accounts for the business show that sales in the 12 months to February 28th last year were €5.9 million. Its operations lost €280,000, a 45 per cent reduction on the previous financial year, when the shortfall was €506,000.

The courts appoint examiners to companies that have difficulty meeting their liabilities, but which can demonstrate they have a reasonable prospect of survival.

The process allows the examiner up to three months to come up with a scheme of arrangement that then has to win the support of at least one class of creditors.

Four years ago, the High Court ruled that companies in examinership can repudiate, or exit, onerous leases.