Shoe Zone swings to loss after ‘difficult’ first half
Shoe Zone has swung to a pre-tax loss of £2.3m in the 26 weeks to 29 March, down from a profit of £2.6m, following a "difficult" trading environment in its first half.
Shoe Zone has swung to a pre-tax loss of £2.3m in the 26 weeks to 29 March, down from a profit of £2.6m, following a “difficult” trading environment in the first half.
The retailer said it delivered a “satisfactory performance” in the period against the continuing backdrop of weak consumer confidence and macro and global economic volatility.
Sales for the shoe brand dropped 6.5% to £71.5m, dragged down by a 10% fall in store revenue to £53.3m from trading out of 31 fewer stores in the period.
It reported a 6.4% jump in digital revenues to £18.2m, which it attributed growth across all online channels and the introduction of free next day delivery on all shoezone.com orders.
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Shoe Zone ended the period with 278 stores after closing 21 outlets during the half. It said it plans to relocate and refit further stores in the second half of the year, which will open before Christmas.
The retailer completed 27 lease renewals in the 26 weeks with an annualised saving of £190k and an average reduction of 19%.
Shoe Zone maintained its profit guidance for the year of £5m, which had been revised down from £10m “due to the challenging trading conditions we experienced, particularly in the first quarter of this financial year, due to weak consumer confidence and unseasonal weather conditions”.
The retailer said that while the second quarter had shown improvement, the trading environment “continues to be difficult as consumer confidence continues to be low”.
“During the second quarter, we have seen more stability/reduction in the price of containers, and a strengthening of sterling against the dollar, both of which will start to benefit in the second half of this financial year,” it added.
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