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Profits soar 124% at Shoe Zone

Value footwear retailer Shoe Zone posted a 124% rise in pre-tax profits to £11.4m in its first full-year results after floating on Aim in May.

Product gross margin for the year to October 4 was up to 61.3% from 59.4% in 2013.

Revenue dropped 10% to £172.9m, reflecting the planned closure of a number of temporary stores. Store numbers were cut by 25 to 545.

The company, which launched on Aim on May 23, said it put a greater emphasis on its back-to-school and comfort ranges during the year and August’s trading was the best in its history. Shoe Zone generated more than £800,000 in a seven-week period through its back-to-school promotions.

Sales of handbags – which were introduced for spring 13 – climbed 73% to £2.5m, while sales of shoe care products soared 94% to £1.4m.

Online traffic increased 25% year on year and a fully responsive site will be launched in 2015 following a recent trial that resulted in a 24% increase in mobile conversion rates.

Shoe Zone launched on Amazon in November 2013 and the platform contributed 8% of online sales at Shoe Zone in 2014. Following the success of the Amazon venture, the retailer launched on eBay in July 2014.

Shoe Zone opened 17 stores, including six relocations, during the year and completed 45 refits, spending £1.9m on capital expenditure. Since year end the retailer has opened six stores – two relocations and four new branches – and has agreed terms on another 10, comprising seven relocations and three new shops.

Chief executive Anthony Smith said: “We have delivered a year of solid profit growth and are continuing to deliver on our self-help strategies outlined at IPO. Despite the well-documented warm start to the autumn season we believe that 2015 will be a further year of growth for the group. The board continues to see significant opportunities ahead and remains confident that the business will perform in line with market expectations.”

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