Shoe Zone experienced a modest revenue increase despite challenges.
- Group revenue rose 1.5% to £76.5m in six months.
- Digital sales surged by 19.6%, reaching £17.1m.
- Physical store sales dropped by 2.8%, now £59.4m.
- Adjusted profit before tax held steady at £2.5m.
Between October 2023 and March 2024, Shoe Zone reported a slight revenue increase of 1.5%, bringing the total to £76.5 million compared to the previous year’s £75.4 million. Nevertheless, the company’s profits before tax remained steady at £2.5 million, as the retailer navigated increased expenses due to the rise in the National Living Wage, ongoing shipping disruptions, and strategic changes to its store locations.
A significant highlight of this period was the robust growth in digital sales, which saw a substantial rise of 19.6%, amounting to £17.1 million. This surge is attributed to Shoe Zone’s continued investment in its online platforms and the enhancement of the consumer shopping journey. Conversely, in-store sales faced a 2.8% decline, falling to £59.4 million from £61.1 million in the previous period, highlighting the shift towards online shopping amidst changing consumer behaviours.
Product margins saw improvement, reaching 62.7% compared to last year’s 60.1%. This enhancement was largely driven by favourable exchange rates and reduced container costs. Even as the company streamlined its operations, reducing its physical presence to 309 stores — a net decrease of 27 stores — Shoe Zone continued to adopt a proactive stance towards relocating and refurbishing existing stores. The company also plans to open additional outlets before the festive period.
Looking forward, Shoe Zone is set to invest over £10 million annually in capital projects, focusing on refurbishment, relocation, digital upgrades, and office infrastructure. Notably, the returns rate improved slightly, down to 11.4% from 11.9%, largely due to their efficient network of physical stores supporting the process.
Despite a resilient performance during uncertain economic times, Shoe Zone has revised its full-year profit forecast downward from £15.2 million to £13.8 million, driven by unanticipated cost increases. These include a £0.4 million impact from the rise in living wages and a £1 million additional charge due to shipping delays and store-related costs. Shoe Zone reiterated its commitment to resilience and strategic success, stating: “Shoe Zone delivered a robust performance in the period against a continuing backdrop of consumer uncertainty and macroeconomic volatility. The performance further demonstrates the resilience of our business and the success of our ongoing strategy.”
Shoe Zone remains committed to navigating economic challenges while focusing on digital growth and strategic physical presence.
