Shoe Zone posts drop in full year revenue
Shoe Zone saw its total group revenue fall to £119.1 million from £122.6 million in the previous year after its stores traded for around 36 weeks of the period due to Covid-19 lockdown restrictions.
In the year to 2 October, digital revenue rose by 58.5% to £30.6 million and now accounts for 25.7% of revenue compared to 6.5% in 2019 after the retailer invested in its digital infrastructure and operations.
The company is now expecting to report a pre-tax profit of not less than £6.5 million in the year compared to a loss of £14.6 million in the prior 12-month period.
Shoe Zone said it traded positively during the period when the UK was not subject to Covid-19 lockdowns and that sales were particularly strong over the back to school period. It added: “This positive trading, alongside the significant cost reduction action taken in 2020 and the Government support schemes Shoe Zone has utilised, has enabled the business to move quickly back into profitability.”
The retailer’s chief executive Anthony Smith added: “Shoe Zone has weathered an intensely challenging year due to the Covid-19 pandemic. The negative impact of this has been largely mitigated due to quick action taken in areas we could control, by reducing costs, continuing and accelerating investment in our digital business and improving operations. As a result, we have emerged as a leaner, stronger and more resilient business.”
Shoe Zone will continue to invest in its people and Shoehub platform in the new financial year. It is also planning to increase its number of drop ship partners, market places, exclusive products and brands and will introduce additional payment and delivery options to enhance the customer experience.
Looking ahead, Smith said: “These are a solid set of preliminary results but there is still uncertainty ahead of us in the next 12 months, not only with the continuing impact of Covid, but also the challenges we face with the global supply chain and inflationary pressures. We have seen a minimum of a five-fold increase in container prices over the last 12 months and this will continue to impact us for at least a further six months until the issues being experienced in the whole supply chain return to more sensible levels.”