Shoe Zone today reports fast digital growth as sales moved online during enforced store closures over the last six months. But the retailer says its overall strategy remains on course, with the pandemic demonstrating the need for investment in both digital and, at a slower pace, new store openings.
Shoe Zone today reported revenues of £40.4m in the half year to April 3 – down by 41% from £68.9m a year earlier. The effect of store closures over at least 16 of the 26 weeks was mitigated by the growth of online sales. Revenue from stores fell by two-thirds (-66.6%) to £22.8m from £63.3m a year earlier, but its digital revenues grew by 220% to £17.6m from £5.5m last time. As a result digital contributed £5.3m to profits, up from £1.9m a year earlier, and its customer database of active online customers grew to 1m.
At the bottom line, the discount footwear retailer, ranked Top100 in RXUK Top500 research, reported a pre-tax loss of £2.6m for the half-year, widening by 4% from a loss of £2.5m last year, as a result of digital growth and “tight cost control”. Shoe Zone ended the half-year with cash of £4.1m but it says it is behind on its rent as it continues to negotiate with landlords, and its dividend is cancelled as it focuses on preserving cash.
During the year the retailer closed 38 shops and moved out of the Republic of Ireland, closing its shops and website there. By the end of the year it had 422 shops in total.
Shoe Zone digital and warehouse teams both operated throughout lockdowns although most staff were furloughed. Operations were disrupted both by container shortages and by the knock on effects of the Ever Given container ship becoming wedged in the Suez Canal.
Shoe Zone chief executive Anthony Smith says: “The last 12 months have been like no other in the company’s history. The Covid‐19 pandemic has had a huge social and economic impact around the world and has led to huge consequences for all businesses, including our own, as we have had to adapt and change to meet the significant challenges in the last year and I thank our loyal and committed staff during this period. However, we have come through this challenging period and are now in position to continue our strategy going forward, with the assumption that no further lockdowns are required.”