In a market where many fashion retailers face challenges, Shoe Zone, the budget-friendly footwear brand, stands out with a remarkable financial performance, reporting «strong sales and record profits» for its latest fiscal year.
Over 52 weeks, ending in September, the company achieved a substantial 6.1% surge in group revenue, reaching £165.7 million. This growth extended to its physical stores, where revenue increased from £129.8 million to £134.8 million, and digital sales, which surged from £26.4 million to £30.9 million.
Notably, the performance of its physical stores was exceptional, despite the reduction in store numbers to 323 from 360 in the previous year. This strategic consolidation of sales in fewer, high-performing stores yielded positive results. The product margin also saw a boost, rising to 62.1% from 61.2% compared to the previous year.
The adjusted profit before tax is projected to be no less than £16 million, a significant increase from the £11.2 million reported in the previous period. This adjustment excludes the profit from the sale of a freehold property and foreign exchange revaluations.
Delving deeper into the revenue figures, the company attributed the 6.1% increase to a robust second half of the year, particularly during «peak summer» and the crucial back-to-school period. This success is especially noteworthy considering the underperformance of many other fashion sector players during the same period. Shoe Zone manages to sell an impressive 14.1 million pairs of shoes annually at an average retail price of £13.50, resonating with cost-conscious consumers.
Additionally, the company highlighted an impressive 17% surge in digital revenue, now constituting 18.7% of total group revenue, up from 16.9% in the previous year.
Furthermore, the increase in the product margin was attributed to a decrease in container prices mid-year and improved stock management, stemming from reduced market volatility.
CEO Anthony Smith expressed his satisfaction, stating that the company continues to build on the momentum achieved in the positive year of 2022. Shoe Zone remains committed to its strategy of expansion, including Hybrid and Big Box formats through refits (15), relocations, and new stores (35). Smith emphasized the company’s resilience, with a strong track record of delivering robust results, even in times of economic uncertainty.
