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Profits decline at Shoe Zone following stores investment

Turnover at value footwear retailer Shoe Zone Group fell 3% from £246m to £239m in the 52 weeks to January 1, due to tough trading conditions. Pre-tax profits also dropped £15.3m to £9.9m over the period.

The company, which is led by chief executive Anthony Smith and includes the eponymous chain as well as the Stead & Simpson chain, said the decline in profit was partly due to increased investment in new stores and refits and also partly due to the release of almost £4m of goodwill in 2009.

Shoe Zone described the year as “successful”, although it added that it had come up against tough comparables from the previous year. In 2009 the company had record sales growth and exceeded expectations due to factors such as the consolidation of the footwear market and favourable weather conditions.

It opened 37 stores during 2010 - 24 Shoe Zone stores and 13 Stead & Simpson stores. The company also refitted 40 Stead & Simpson stores and 36 Shoe Zone stores. It brings its total store count to 565 for Shoe Zone and 230 for Stead & Simpson.

The group is planning a further 80 store refits during 2011 and is also looking to diversify through “additional online channels”, including the launch of a transactional website for Stead & Simpson.

Trading to date in 2011 has been “in line with expectations”, the business said.

Shoe Zone, which bought Stead & Simpson out of administration in 2008, said it was investing in recruitment and training to “strengthen and extend” its customer service offer.

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