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Shoe Zone acquisitions go straight into profit

Shoe Zone Group, the company that led the consolidation of the footwear sector with its rescue of Stead & Simpson and acquisition of Shoefayre, achieved pre-tax profits of £8.1m for the 53 weeks to January 3.

The company said profits were down slightly from £8.8m the previous year partly because of the acquisition of Stead & Simpson out of administration in January 2008, which turned it into an 800-store group.

However, according to accounts filed at Companies House, Shoe Zone Group’s acquisitions – it also bought Shoefayre in September 2007 but has since dropped the fascia – made an operating profit of £751,000. Both businesses were making losses of about £10m before they were taken over by Shoe Zone.

The Shoe Zone chain’s operating profit fell slightly from £8m in 2007 to £6.9m.

Turnover from continued operations was £174.5m, up 12%. The acquired businesses contributed £63m in sales, giving the group annual sales of £237.6m.

Shoe Zone Group chief executive Anthony Smith, said: “The results reflect a significant turnaround of the two businesses [Stead & Simpson and Shoefayre] in difficult trading conditions. We think the results are impressive and that the 2009 accounts will show a significant improvement, having had further time to improve the acquired businesses.

“The underlying Shoe Zone business continues to trade very well. We are confident the Stead & Simpson business will, with the right investment, become a strong brand again over the coming years and make a strong impact on the medium-term profitability of the group.”

Separately, pre-tax losses at out-of-town footwear giant Brantano UK widened to £17.2m over the year to December 31, 2008, but this included a one-off cost of £9.4m.

It is not clear what the one-off charge related to, but according to the annual report filed at Companies House, the charge is not indicative of the retailer’s underlying performance. Sales over the period declined to £109.4m from £115m the year before.

During the year Brantano UK was taken over by Dutch-based Macintosh Retail Group.

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