Shoe Zone [IRDX RSHZ] this week said multichannel contributed £2m to the business after a year in which revenue from that channel grew by a third.
The Top100 trader in IRUK Top500 research reported overall revenue of £157.8m in the year to September 30 – a year in which the group celebrated a century in business. That’s down on the £159.8m reported last year. This, it said, reflected a strategy of closing smaller loss-making stores and concentrating on new big box stores. By the end of the year, 6% of stores were loss-making, down from 11% three years ago. Pre-tax profits of £9.5m were down on £10.3m last time, which the retailer said was largely down to the foreign exchange effects of importing goods from the Far East to the UK. Multichannel revenues, however, were up by 34% and accounted for 5.3% of sales, up from 3.9% a year earlier.
Chief executive Nick Davis said: “I am pleased with the group’s performance in what continues to be a challenging retail environment. We are still well positioned in the market given our strong value retail proposition and continue to manage our store portfolio successfully through our ongoing store rationalisation and refit programme. Following a successful trial of the Big Box concept during 2017, we are now targeting 10 new Big Box stores per year in the medium term.
“We continue to make good progress against our strategic objectives and have made a solid start to the year with trading in line with expectations. The board remains positive about the outlook for the group for the remainder of the year.”
Online sales grew by 34% to £8.3m from £6.2m a year earlier, and the department contributed £2m before head office costs. The growth, it said, came from a focus on UK sales both through its own website and online marketplaces, alongside its expansion into international markets, where revenue is growing but still relatively small. The business launched into the US via Amazon.com during the year.
Some 78.9% of visits to website come from mobile and tablet devices, while overall conversion rates remained stable at 4.2%. Conversion via its mobile-first website came in at 3.55%, although desktop conversion fell slightly. Shoe Zone said that its search engine optimisation strategy had boosted traffic but slightly diluted conversions, and that it would address this in 2018.
It has also worked to drive revenue and conversion through email. In 2017 it focused on converting active users and re-engaging those who responded less often. This strategy resulted in database growth of 25% and email campaign sales up by 37% on the previous year, to account for 13% of site revenue.
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