Footwear specialist Shoe Zone’s half-year profits slipped 26% after a decrease in sales from store closures and unseasonable trading conditions.
- Shoe Zone pre-tax profits slip 26% to £2m
- Revenues down 5.7%, hit by warm weather and store closures
- Multichannel revenue increases 30%, while Amazon and eBay launches prove fruitful
The shoe retailer’s pre-tax profits decreased to £2m in its half-year results to April 4 2015.
Revenue also dipped 5.7% from £82.9m in the first half of 2014 to £78.2m this year. The retailer blamed the decrease in revenue on its planned nine loss-making store closures and unfavourable trading conditions towards the end of the period.
Shoe Zone said the warm weather conditions which had an effect on the fashion sector’s autumn/winter trading slowed revenues towards the end of the first half. Footwear sale volumes increased, but the average price fell because of customers choosing different types of products, such as ladies choosing ankle boots rather than long leg boots.
Shoe Zone chief executive Anthony Smith said: “We have made solid progress across the business in the first half and are particularly pleased with the performance in multichannel, where we saw a 30% increase in revenue. We continue to rationalise our store portfolio, closing loss-making Grade 3 (small format) stores and opening more of our larger Grade 1 (large format) stores.
“We remain focused on our growth levers: extending and improving our product range to leverage our market leading position in the value sector; driving efficiency in our property portfolio; operational investment in our warehouse facilities; and enhancements to our multichannel offering.
“Current trading has remained in line with expectations following our April trading update. The Board continues to look to the future with confidence.”
Shoe Zone’s multichannel revenue increased 30% and the retailer said this continues to be a higher increase rate than its average high street stores. Its website is now fully responsive.
In October 2014, Shoe Zone completed its launch on eBay and reported that 7% of its multichannel revenue is already coming from this channel. Its sales on Amazon are also growing, now representing 17% of multichannel revenues.
Its email club has grown 14% over the first half, and customer returns have fallen to 10.5% of sales from 12.9%.