SHOE STATION GROUP INC 10-K

ITEM 2. PROPERTIES Physical Stores As of our Fiscal 2024 year end, we leased our 430 stores located across 36 states and Puerto Rico. Approximately 98% of the leases for our existing stores provide for fixed minimum rentals and approximately 48% provide for contingent rental payments based upon various specified percentages of sales. Certain leases also contain escalation clauses for increases in minimum rentals, operating costs and taxes. Our stores utilize between 8,000 and 20,000 square feet of leased space. The sales area comprises substantially all (greater than 80%) of our typical gross store footprint. Following is a roll forward of our leased locations over the last five years: Historical Store Count Fiscal Years 2024 2023 2022 2021 2020 Stores open at the beginning of the year 400 397 393 383 392 New store openings 4 5 4 1 4 Stores acquired 28 0 0 21 0 Permanently closed (2 ) (2 ) 0 (12 ) (13 ) Stores open at the end of the year 430 400 397 393 383 Stores relocated 2 0 0 2 0 Stores rebannered 10 0 0 0 0 We performed a store improvement plan that was completed in Fiscal 2021. As part of that plan, we identified underperforming stores and worked to address these stores' performance through renegotiation of lease terms, relocation, or closure. While we continue to actively monitor our store portfolio, we do not expect any further significant closures over the next several years. The following table identifies the number of our stores in each state and Puerto Rico as of our Fiscal 2024 year end: State/Territory State/Territory Alabama 22 Nebraska 2 Arizona 3 New Jersey 1 Arkansas 10 New York 2 Colorado 3 North Carolina 18 Delaware 1 North Dakota 3 Florida 33 Ohio 18 Georgia 21 Oklahoma 7 Idaho 4 Pennsylvania 10 Illinois 32 Puerto Rico 5 Indiana 26 South Carolina 11 Iowa 11 South Dakota 2 Kansas 5 Tennessee 19 Kentucky 12 Texas 48 Louisiana 11 Utah 2 Michigan 13 Virginia 6 Minnesota 2 West Virginia 6 Mississippi 9 Wisconsin 28 Missouri 22 Wyoming 1 Montana 1 Total Stores 430 27 Distribution Center Our primary 410,000 square foot distribution center is located in Evansville, Indiana. This facility can support the processing and distribution needs for approximately 470 stores. With additional resources added, including our right to expand the facility by 200,000 square feet, the current location could provide processing capacity for approximately 650 stores. We lease the facility from a third party. The initial lease term expires in 2034 and contains renewal options. Corporate Headquarters We own our corporate headquarters located in Evansville, Indiana and lease office space for our Southern office located in Fort Mill, South Carolina. ITEM 3. LEGA L PROCEEDINGS From time to time, we are involved in certain legal proceedings in the ordinary course of conducting our business. While the outcome of any legal proceeding is uncertain, we do not currently expect that any such proceedings will have a material adverse effect on our financial position or results of operations. ITEM 4. MINE S AFETY DISCLOSURES Not applicable. 28 PART II