Tough times for shoe group

HIGH street shoe chain Stylo announced losses of more than £10m as the ongoing tough conditions on the high street continue to affect its business.

The Bradford-based owner of Barratts, PriceLess and Shellys, said in its annual results for the year ended February 2008 that turnover had fallen by 3.8% to £223.3m as the group continued to be hit by increasing costs and a competitive shoe market.

Losses increased to £10.3m for the year to February 2 from £6.7m the previous year.

The group said a decision had also been taken to close the remaining Shellys stores as the group could forsee no return to probability in the future.

The brand has produced losses of £9m since it was acquired by Stylo in 2003.

Stylo chairman Michael Ziff said the “poor performance” of the group reflected the difficult period faced by retailers in the current climate which had resulted in the sale or closure of several of its key competitors – including Stead and Simpson.

He said: “We have taken positive actions to enable us to focus on our core Barratts and PriceLess fascias, including the disposal of our loss making division Shellys and increased the depth of experience of our Barratts senior management team. We are well positioned to take advantage of any improvements in the retail environment.”

The group blamed mild weather on poor sales in its autumn/winter ranges. In particular a slowdown in the sale of boots affected its probability of the period.

Mr Ziff said that the group was continuing with its strategy of disposing of unprofitable stores – and was investing significantly in developing a more modern store format in its Barratt’s division – the first of which will open in Meadowhall, Sheffield, this month.

Assuming the new format is successful this is expected to be rolled out – having a significant effect on profits in 2009.

Mr Ziff added: “The shoe industry remains highly competitive. We are faced with increasing costs in the form of rents, business rates, minimum wage and power costs along with the exposure to currency risk.

“In addition, recent increases in inflation and the general downturn in consumer spending will continue to put sales under pressure.”

In a separate announcement the group said that the managing director of its Barratts division, David Patrick, had resigned to “pursue other career opportunities”.

David Lockyer, who was previously appointed a non-executive director of the company, will replace him.