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Shoe Zone sales and profits steady

Shoe Zone’s financial results for the six months to 30 March remained steady despite “sector issues”.

The footwear retailer reported flat statutory profit before tax at £1m, and revenue dipping by 1% to £73m year on year.

Gross margin was up to 62%, from 60.6% in the same period in 2018.

Digital sales increased by 4.9% to £5m, leading to a profit contribution of £1.5m.

The business had net cash of £3.3m, compared with £5.9m at the same time last year.

Rent on renewals during the half fell on average by 18.5%, equivalent to a full-year saving of £334,000.

Rent as a percentage of turnover remained flat at 11.9%.

The retailer was operating from 26 “Big Box” stores at the end of the period, and they contributed £5.5m in revenue in the first half.

By the end of the month Shoe Zone will be operating from 33 Big Box stores, and is on track to meet its target of 45 by the end of 2019.

The business has also started trialling a new “Hybrid” store format.

Nick Davis, chief executive of Shoe Zone, said: “The first half of our financial year has been positive for the group, trading in line with management’s expectations and achieving profitable revenue growth in our two key growth areas of digital and Big Box.

“Our ongoing strategic focus continues to be on the Big Box rollout with a target of 45 stores by the end of December 2019. This is progressing to plan and we will be operating from 33 Big Box stores by the end of May.

“Additionally, our refreshed digital strategy has also generated profitable growth, laying the foundation for a positive outlook for the rest of the year. This good performance also reflects our close management of costs, and ability to maintain appealing key price points and multi-buy offers for our customers. Additionally, we have experienced lower administration costs thanks to careful control of property costs and beneficial reduction in foreign exchange.

“Trading momentum has continued into the second half, in line with market expectations. With our growth strategy in place, we believe we are favourably insulated against many of the structural sector issues.”

 

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