Shoe Zone, the budget shoe and accessories retailer, has reported a 2.7% decline in group revenue for the financial year ending September, bringing total earnings to £161.3 million. This drop comes as the company continues its strategy of reducing store locations, with its portfolio shrinking to 297 stores from 323 a year earlier. The focus is now on operating fewer, larger stores.
Despite the revenue decline, the retailer reported a slight improvement in product margins, which rose to 62.8%, up from 62.1% in the previous year. The margin increase was attributed mainly to lower container costs during the first half of the year.
However, Shoe Zone’s overall earnings have not kept pace with last year’s performance. The company expects adjusted pre-tax profits to be no less than £9.5 million, significantly lower than the £16.5 million earned in the previous financial year.
Shoe Zone attributed the revenue reduction partly to “unseasonal weather” during the second half of the year, particularly during peak summer, which impacted sales. Additionally, the closure of 26 stores affected overall trading. Nevertheless, the company noted that its Back-to-School sales during August and September exceeded last year’s performance.
While container prices were favorable during the first half of the year, they started to rise again in March, impacting the second half of the financial year. The company expects these higher costs to continue into the first half of 2025.
Chairman Charles Smith reflected on the company’s mixed year, stating: “It was a year of two halves. The first half traded in line with expectations and performed better than last year. However, the second half fell below our expectations.” Despite these challenges, he highlighted the growth of the company’s digital business, driven by the introduction of free next-day delivery for all online orders, which has boosted online sales.
Shoe Zone continues to navigate challenging market conditions, balancing physical store reductions with the growth of its digital operations.
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