Shoe Zone shares soar as firm steps back into profit
Shares in footwear retailer Shoe Zone soared as the company said it expected to swing to an annual profit, but warned that Covid, supply-chain and inflationary issues still presented challenges in the next 12 months.
The company said pre-tax profit for the year to October 2 would be at least £6.5m, compared to the £14.6m loss recorded last year.
Current year revenue was expected to fall to £119.1m from £122.6m, due to the effect of the pandemic during the first half as its stores were closed for 16 weeks. All stores were open and fully trading as at the end of April.
Digital revenue rose to £30.6m, up from £19.3m in 2020 and £10.6m in 2019 before the pandemic struck. The full-year 2021 total now represents 25.7% of overall revenue compared with 15.7% last year and 6.5% two years ago.
"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 company said on Wednesday
“Shoe Zone has traded positively during the period the UK was not subject to government mandated lockdowns and particularly over our key back to school period.”
The company closed the year trading out of 410 stores, compared with 460 a year earlier, made up of 343 original Shoe Zone stores, 51 big box and 16 hybrid stores.
It plans to expand the number of big box and hybrid formats through relocations or refits of existing Shoe Zone stores. There will also continue to be a reduction in the number of original shops that are no longer commercially viable, the company added.
Chief executive Anthony Smith said the impact of the pandemic had been mitigated by cutting costs, continuing and accelerating investment in Show Zone’s digital business and improving operations.
“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,” 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.”