Mixed results for footwear giant

Leicester-based retailer Shoe Zone is keen to dismiss the “doomsayers” forecasting the death of the UK high street, despite reporting a mixed performance in its preliminary results for the 53-week period to 5 October 2019.

The footwear giant has seen its revenue increase by 0.9 per cent to £160 million, but its underlying profits before tax are down from £11.3 million to £9.6 million.

The company’s cash balance has also decreased from £15.7 million in 2018 to £11.4 million.

However, in more encouraging news, the firm’s digital revenue has grown by 9.2 per cent to £10.6 million, and the positive performance of its new Big Box and hybrid town centre stores has given it cause for optimism.

Anthony Smith, chief executive of Shoe Zone, said: “Despite it being a difficult year for Shoe Zone, the business has achieved revenue growth, and delivered underlying profit before tax marginally ahead of our revised expectations following our revaluation of freehold property.

“Alongside the continued momentum in Big Box expansion and Digital growth, Town Centre renewal is the third key focus for our refreshed strategy. Following a successful trial of four hybrid stores, in 2020 we plan to convert a further 20 of our traditional stores to this more premium town centre hybrid model.

“Town centre stores remain an important component of our proposition and we don’t agree with doomsayers referring to the inevitable ‘death of the high street.’ However, it’s stark that over the past 10 years the rates paid as a proportion of our rent has increased from 26.4 per cent in 2009 to 54.3 per cent in 2019. Despite rationalising our store estate, the value of rates paid has increased by £700k despite having 38 per cent fewer stores and 30 per cent lower sales. 

“For the retail sector to continue to play its important role in the UK economy, and town centres to serve their communities, it is vital that Government recognises the impact of the increasing financial burden placed on businesses on the High Street by successive governments and their policies.

“Notwithstanding the broader sector challenges, I am delighted to be back running this market-leading business, knowing its potential to produce great results. The core business model remains robust and combined with the refreshed strategy of Big Box expansion, higher digital growth and town centre renewal, the board is confident that this enhanced strategic focus will improve customer experience, increase market share and drive shareholder returns.”