Shoe Zone plans to bring its new out-of-town “big box” store concept to more affluent high street locations following a successful trial in Aberdeen.
The footwear retailer launched the new format, which allows Shoe Zone to stock third party brands alongside its own-label product, in August 2016.
Last month the business opened its first big box store in a high street location in Aberdeen. Shoe Zone CFO Jonathan Fearn said the positive reaction to the trial will result in more high street openings, including a store in Norwich.
“It’s going really well. We want [the big box format] to be both an out-of-town format and a high street concept. The brand offer allows us to move into posher towns, which wouldn’t work for the traditional Shoe Zone product. The Aberdeen store is in a prime location as is the new Norwich store. The rollout will be weighted towards retail parks, but the focus on high streets will certainly grow.”
Shoe Zone currently has four big box stores, including Aberdeen, and six further stores are in the pipeline for the end of the current financial year, including the store in Norwich and two out-of-town shops in East Beckton in London, and Oxford.
Fearn said the business is in talks to take over some former Brantano stores.
Shoe Zone’s statutory profit before tax fell 84.2% to £300,000 in the six months to 1 April, hit by the weaker value of sterling.
The business, which previously hedged 80% of its purchases, has now increased its hedge to 90%-95%.
The value footwear retailer made an underlying profit before tax of £1.3m during the half-year, down 23.5% on the same period last year. Revenue dipped by 2.3% to £72.9m as it continued to rationalise its store estate.
During the period the retailer opened nine new stores, completed three relocations and closed 12 stores. Shoe Zone now has 504 stores across the UK and Ireland.
To mitigate costs the business has increased orders placed directly with overseas factories to 83.4% from 72.2%, said Fearn: “It’s a lot easier to negotiate face to face with factories. We’re proud to be a value retailer, and we don’t want to pass any of that cost onto the consumer. We are trying to resist price increases.”
The business is investing in driving up average order value by introducing staff incentives, multi-buy deals and developing its accessories range, which Fearn said are add on items for shoppers.
Non-footwear sales jumped 24% for the half compared with the same period last year, but still only account for “a couple of percent” of total sales.
Fearn said trade had been “encouraging” since April and the business is confident for the rest of the year despite uncertainty surrounding the general election and Brexit: “There is a certain level of uncertainty with the election, Brexit and inflation, but from our point of view we remain focused on good value and are confident ahead of our back-to-school peak.”