Footasylum said today that it would continue to invest in its online and store operations despite warning on half-year and full-year profits.
The footwear retailer, a Top100 retailer in IRUK Top500 research, today said it expected to post revenues of £98.6m for the six months to August 25 – 18.5% ahead of the same time last year. Over the period, online sales grow by 28.5% to £30.2m, and wholesale sales grow by 200% to £2.1m, while sales from its 66 stores grew by 12.4% to £66.3m.
But Footasylum said in today’s trading update that “weak consumer sentiment on the high street”, combined with delays to its store expansion programme had hit business in the current financial year. In July and August that became still more challenging, and the business now expects to report a small loss in the first half of the year while full-year profits look set to come in at less than half of the £12.5m reported last year. It said it had delivered several technology projects in the first half and would continue a strategy of upsizing existing stores while opening more: six new stores are expected to be open by December.
The store expansion plan, it says, is important in order to improve its “existing strong brand relationships” while also improving the customer experience in store.
Executive chairman Barry Bown said: “These are undoubtedly challenging times in the retail industry and, in common with many other businesses, Footasylum’s trading has continued to be impacted by weak consumer sentiment. On top of that, increased clearance in stores has led to a reduction in gross margin, and we have also had some unforeseen delays in our new store openings and upsizes. However, we have continued our programme of investment, both in upsizing our stores and in our digital capabilities, and are working hard on a number of initiatives to maximise the company’s performance during the upcoming peak trading period.
“Despite the challenging outlook, we are encouraged by the continuing progress that we are making in improving our online performance, rolling out our store opening programme, and further enhancing our supplier relationships, and therefore remain confident in the company’s long-term prospects.