Digital growth and out of town “big box” stores increased revenue at footwear retailer Shoe Zone by 0.9% to £162m for the 53 weeks to 5 October 2019.
Underlying profit before tax for the period fell to £9.6m from £11.3m the previous year. However, this profit figure was ahead of expectations.
The fall in profitability was blamed on “government imposed increases in operational costs”, and chief executive Anthony Smith was highly critical of the business rates scheme. He noted that rates paid as a proportion of rent had risen from 26.4% in 2009 to 54.3% in 2019 and had increased by £700,000, despite Shoe Zone having 38% fewer stores.
Smith commented: “For the retail sector to continue to play its important role in the UK economy, and town centres to serve their communities, it is vital that government recognises the impact of the increasing financial burden placed on businesses on the high street by successive governments and their policies.”
The business also flagged that it had secured 23.6% rent reductions across 60 high street stores.
The overall rise in sales was attributed to the Shoe Zone’s out of town “big box” stores, during the year 21 new units were opened– taking the total number to 45. The stores generated £15.6m revenue for the year, up from £7.1m last year.
Digital revenue was also up, rising 9.2% to £10.6m.
Moving forward, Smith said that high street and town centre stores were a focus for the group with 20 stores in the current portfolio earmarked for conversion into a premium “hybrid” format which the brand trialled this year.
“Town centre stores remain an important component of our proposition and we don’t agree with doomsayers referring to the inevitable ’death of the high street’,” he said.