Schuh swung to a pre-tax loss of £6.1m for the year to January 2019, compared to a profit of £13.1m in 2017/18, blaming myriad industry issues including increased occupancy costs, Brexit uncertainty and a consumer spending slump.
The footwear retailer’s turnover for the period fell by more than £20m, from £308.5m to £288.4m.
Finance and HR director David Gillan-Reid said: “We have been faced with an unprecedented number of trading headwinds, including increasing occupancy (rent, rates and service charges) and staff costs (minimum/living wage, apprenticeship levy, pension auto-enrolment costs etc.), Brexit uncertainty/political instability, and consumer spending being lower on footwear and apparel.
“In addition, product and brand availability with margin pressure given the high dominance of sports brands, an extremely promotional environment and a significant footfall decline on the high street, in shopping centres and retail parks all make for a tough trading period. Added to this is the increased cost of doing business online without a corresponding reduction in what are generally fixed store costs, the necessary investment in marketing to keep existing customers and attract new, and the additional cost of a CRM system to comply with GDPR legislation.”
He added that Schuh was “optimistic for its future”.
The footwear retailer appointed retail property consultant CAPA in September to assist in reducing occupancy costs across its 130-strong store estate.
During the current financial year, it shut down its German operation of three stores. The German language website continues to trade as part of the UK company. The business is due to take a final decision on winding up the entire German entity shortly.
Schuh also launched its new store design concept – dubbed Twenty Twenty – aimed at the 14-to-24-year-old Gen Z shopper since its financial year end.