Affordable footwear company Shoe Zone has reported a drop in revenue and profit as weak demand and high costs weigh on the high street retailer amid a revamp of its physical estate.
Revenue fell by 2.7 per cent to reach £161.3m in the year to 28 September, down from £165.7m in 2023.
Profit before tax fell by 42 per cent, to £9.5m, on unseasonably wet weather plus “year-on-year increases in the cost of energy, depreciation, National Living Wage and container prices in the second half”, Shoe Zone said.
The company’s share price fell by over ten per cent in early trades. It has fallen by nearly 19 per cent in the last month and more than a third in the year to date.
In March, the company warned that it was trading below expectations due to higher-than-expected costs related to disruption in the Red Sea and slow trading over the autumn season.
High street footfall also has yet to recover to pre-pandemic highs, with 11 out of the last 12 months showing a monthly decline in the number of shoppers on streets.
Net cash at the end of the financial year was £3.7m, from £16.4m in 2023, due to dividends of £8m, as well as capital expenditure of £12.3m for store refits and the company’s relocation programme for employees.
The budget footwear provider is currently undergoing a revamp of its physical estate. The number of Shoe Zone stores in operation fell by 26 during the year, to 297. The company closed 53 stores, opened 27 and refitted 28.
Chair Charles Smith said: “A year of two halves, with the first half trading in line with expectations and ahead of the previous year, however, the second half trading was below expectations due to unseasonal weather conditions, particularly at peak summer, however, our key Back to School period traded above expectations at the end of the year.
“Our Digital business continued to grow, driven by the introduction of free next day delivery for all shoezone.com orders. “