Shoe Zone has tough first half, reopenings paint mixed picture
Budget shoe retailer Shoe Zone on Tuesday reported a loss for the six months to April 3 on the back of lower sales, although this was hardly a surprise given how weak the footwear category has been during lockdowns.
The company said it saw revenue of £40.4 million, down from £68.9 million a year earlier. Store revenue fell to £22.8 million from £63.3 million, although digital revenue more than trebled to £17.6 million. The digital conversion rate was also up to 6.43% from 3.47% and the company said it had over a million engaged users in its webstore database.
But the statutory pre-tax loss was £2.6 million, slightly wider than the loss of £2.5 million a year ago. Yet the company ended the half with a net cash balance of £4.1 million, which was better than the £3.6 million of a year earlier.
Its shops were shut for a minimum of 16 weeks during the period, although its digital and warehouse teams were able to operate throughout. It also saw supply chain disruptions due to container shortages and the Suez Canal blockage.
The company, which has now exited its Republic of Ireland business, clearly had a tough time in its first half. But it was helped through by the UK furlough scheme and other business aid packages that have been put in place.
But it's retaining a cautiously upbeat stance and the strategy for its 422 stores remains broadly as it was before the pandemic took hold. The company said the last 12 months has proved the value of its move to a stronger focus on digital. And it will continue its focus on big-box and hybrid store expansion, although these will be happening at a slower pace due to cash constraints.
The company also said it enters the second half with the hope that it has seen the worst of the pandemic impact. None of its stores were open in the first two weeks of the second half but after that, trading started strongly, although it has now settled down to a more mixed picture. That means good sales on high street and in retail parks but a weaker performance in shopping centres.
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