Schuh, the Scottish foot-wear retailer, said it was set to beat the blues affecting the UK's high street with growth in core earnings and more store openings.

Headquartered in Livingston, Schuh said it was on track to grow earnings before interest, tax, depreciation and amortisation by 16% to £11.5m in the year to March.

With the key Christmas period out of the way, Schuh's directors are confident that the chain will record annual sales of £115m, up £8m on the previous year.

The increase was broadly in line with growth in the company's estate. After opening four stores in the last four months, Schuh has 50 stores across the UK and in Ireland.

However, managing director Colin Temple admitted that Schuh had paid a price for its attempt to gain market share.

"A large number of competitors have chased share at the expense of profitability over the last couple of years," he said.

"We were not immune from this and our performance dipped a little in 2006."

While confirming that Schuh was profitable at the pre-tax level, finance director Mark Crutchley declined to give details, saying operating profitability was a better measure.

Nonetheless, against the backdrop of what Temple described as an exceptionally difficult market for footwear, Schuh's performance was noteworthy.

The recent collapse of the Dolcis shoe chain into administration spoke of tough trading conditions for sector players.

The Qube value footwear chain owned by Sir Tom Hunter's West Coast Capital has had a tough time lately.

However, the upmarket Office shoe chain owned by West Coast has done well.

Schuh and Office may be benefiting from an apparent split in the market which has seen firms that sell to a more affluent customer base faring better than value operators.

Schuh has invested heavily in developing a web offering and a presence on online outlets like eBay.

The directors have agreed to open stores in Bristol and London and hope to open others in 2008.

Crutchley discounted acquisitions. "It would be a very risky thing to do. We prefer to keep our focus on developing the business and picking up share."

Schuh is refinancing £35m debt incurred to fund a management buy-out in 2004.

However, Crutchley, a member of the MBO team, said the refinancing did not reflect problems with servicing the debt. Rather, it was an exercise that had been planned to pay for redeeming convertible loan notes held by Schuh's previous owners.

Shareholders before the buy-out included Sandy Alexander, who founded the Schuh concept, and Ashleybank Investments, owned by David Stevenson, who built up Edinburgh Woollen Mill.