Shoe Zone finds it tough in full year but big-box and digital are strong
It’s always interesting to hear how retailers at the value end of the market are doing at the moment, as we usually assume that cautious consumers would offer them a boost compared to their mid-market peers. But as we live in an era when all the old rules are being broken, such assumptions can be wrong.
Value chain Shoe Zone, which sells 18 million pairs of shoes annually with an average retail price of around £10 a pair, delivered a full-year trading update on Thursday and confessed that the last year (the 53 weeks up to October 5) had been “difficult”. Trading conditions were particularly “challenging” in the second half.
Clearly, many consumers aren’t only abstaining from buying higher-priced goods but low-priced shoes too.
That said, the company’s big-box stores and digital ops “have continued to progress strongly”. That means it managed to turn in a revenue rise, with revenues up to £161.9 million in the period, from £160.6 million a year ago. Although given that the prior-year was a 52-week period and this time there was an extra week, the rise wasn’t perhaps so impressive. At least the company expects to report pre-exceptional pre-tax profit for the period in line with revised market expectations.
The retailer ended the year with 500 stores, having opened 24 and closed 16 during the period, and within the 24 openings, 21 of them were part of the continued rollout of the big-box format. That means it now has 40 big-box locations with a target of 45 by the end of this year.
CEO Anthony Smith said the company “ended this difficult year in line with our revised expectations. It is early days in the new financial year but we have been encouraged by the performance so far. There are a further 20 big-box openings planned for the coming year which, alongside our strong digital momentum, will continue to drive growth in the future.”
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