Shoe Zone’s revenue dipped by 1.3% year on year to £157.8m in the 52 weeks to 30 September, after it closed more of its loss-making stores.
The value footwear retailer made a statutory pre-tax profit of £9.5m, down 7.8% on 2016. It blamed the fall primarily on the weakness of sterling, which increased the cost of goods imported into the UK.
During the period Shoe Zone closed 35 stores, opened 21 and refitted 29 – bringing its total at year-end to 496. Six of the new stores were in its “big box” format – and three more have opened since the end of September.
It said loss-making stores now make up 6% of the store portfolio, compared with 11% three years ago. It aims to reduce this to 5% in the next 18 months.
Its “multichannel revenue”, from channels excluding stores, increased by 34% to £8.3m.
Chief executive Nick Davis said: “I am pleased with the group’s performance in what continues to be a challenging retail environment. We are still well positioned in the market given our strong value retail proposition and continue to manage our store portfolio successfully through our ongoing store rationalisation and refit programme.
“Following a successful trial of the Big Box concept during 2017, we are now targeting 10 new Big Box stores per year in the medium term.
“We continue to make good progress against our strategic objectives and have made a solid start to the year with trading in line with expectations. The board remains positive about the outlook for the group for the remainder of the year.”
Shoe Zone’s product gross margin strengthened from 62% in 2016 to 63.2%.
Its average transaction value improved by 3.3% during the year, while the proportion of footwear orders placed directly with overseas factories increased from 72.2% to 84.7%.
Revenue from non-footwear ranges, including handbags, school bags, lunch boxes, purses and accessories, grew by 14.5% to £8m.
Shoe Zone products are now available in the US, adding to existing international markets of France, Germany, Spain and Italy via Amazon Marketplace.