Shoe Zone returns to profit after store closings

Shoe Zone returned to profit last year after closing loss-making stores.

The discount shoe retailer saw its shares rise on Tuesday morning after praising the recovery in sales and profitability following the impact of the pandemic.

The company posted pre-tax profit of £ 9.5million for the year ended October, down from a loss of £ 14.6million a year earlier.

It comes after the group closed some 50 unprofitable stores during the year, bringing its portfolio to 410 sites.

Shoe Zone told its shareholders that it was also stimulated by the opening of new stores in the “big box and hybrid” format from its original smaller formats.

He said the move saw the business move to better locations and allow the business to stock a greater range of styles.

The company currently has 51 large-format big box stores and plans to expand that number to 100 locations.

The retailer’s sales during the year fell 2.8% to £ 119.1million after being affected by long periods of forced shutdowns.

He said the closures were partly offset by an increase in digital revenues, which jumped to £ 30.5million from £ 19.3million the year before.

Anthony Smith, Managing Director of the retailer, said: “Shoe Zone has had a very successful year thanks to the hard work of our teams, reducing costs, reducing non-essential capital expenses, continuing to accelerate investments in our digital activity while improving and streamlining operations.

“The decision to invest in our infrastructure and digital operations has resulted in significant growth in online sales over the past 12 months, which allows us to continue investing in our people and our shoehub platform.

“We aim to increase drop shipping partners, marketplaces, exclusive products, brands and plan to introduce additional payment and shipping options to improve the customer experience.”

Shares of the company were up 18.6% to 140p in early trading.

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