Digital focus helps Shoe Zone stride through a tough year
Some hefty cost-cutting and accelerated investment in digital ensured Shoe Zone’s tough financial year to 2 October was far from a pandemic-induced disaster.
With stores able to open just 36 weeks in the 52-week trading year, online came to the rescue for the value footwear retailer as revenues were down just £3.5 million compared to 2020 figures.
Total sales for the year slipped to £119.1 million from £122.6 million a year ago, albeit from 50 fewer stores. On the flip-side, digital revenue jumped 58% to £30.5 million, from £19.3 million in 2020.
And the hefty cost cuts, mostly on the closure of those non-profitable stores, alongside reducing non-essential capital expenditure, actually turned the previous year’s £14.6 million pre-tax loss into a pre-tax profit of £9.5 million this time. Keeping the digital returns rate to an impressive 8.4% also helped the balance sheet.
The retailer ended the year with 410 stores with net closure of 50 locations. It cut the number of hybrid stores by six to 16 but left its successful 51 big-box stores untouched.
It also said annualised lease renewal savings added up to £1.8m, with an average reduction of 53%.
Chief executive Anthony Smith said: “Shoe Zone had a very successful year. The decision to invest in our digital infrastructure and operations has led to significant growth in online sales over the last 12 months.”
And on the front foot, he added: “We aim to increase drop ship partners, marketplaces, exclusive products, brands and plan to introduce additional payment and delivery options to enhance customer experience.”
And don’t expect its stores count to remain the same for long. He noted that “property supply continues to outstrip demand and we therefore expect to take advantage of this environment and significantly improve our property portfolio over the medium term.
“We have already restarted store relocations, refits, infrastructure changes at our head office and further investment in digital. All of these areas are key to our strategy going forward and we will commit to spend 3% of turnover annually on capital projects as we did pre-pandemic.”
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