Shoe Zone steps cautiously into uncertain environment
Retailer Shoe Zone is concerned about the impact of issues in the global supply chain and inflationary pressures as it looks to put its best foot forward after an “intensely challenging year”.
Shoe Zone chief executive Anthony Smith sees “uncertainty ahead of us in the next 12 months” as the retailer emerges from the pandemic.
He said: “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.”
Shoe Zone said it “largely mitigated” the impact of Covid-19 through quick action to reduce costs, accelerate investment in its digital business and improve operations.
“As a result, we have emerged as a leaner, stronger and more resilient business,” said Smith.
Digital sales now represent more than one-quarter of revenue – although this was helped by stores being closed for 16 weeks of the financial year. Its £119m revenues are down £43m on the pre-pandemic 2019 figures, although it expects to report pre-tax profits of at least £6.5m.
Shoe Zone has exited “poor performing” sites over the last 18 months but is continuing with its rollout of Big Box and Hybrid formats by targeting key towns for conversion or relocation.
It aims to double its Big Box locations to 100 and increase its Hybrid stores from 15 to 150. However it expects its overall footprint in the future will be similar to now, but from a reduced number of locations.