Huge shoe chain with 278 shops shuts over 30 stores in store shake-up
A BIG shoe chain has shut more than 30 stores over the past year, it has been revealed.
Shoe Zone has tipped to a loss and reported lower sales after shutting more than 30 shops over the past year.
Shares in the retailer plunged by a fifth on Wednesday after the update to investors.
The company, which sells a range of branded and own-label footwear, said it made a pre-tax loss of £2.3 million in the six months to March 29, compared with a profit of £2.6 million a year ago.
Revenues dipped by 6.5% to £71.5 million over the period, partly due to the retailer trading out of fewer stores than it was a year ago, while digital sales rose by 6.4%.
Shoe Zone has 278 shops across the UK, which is 31 fewer than a year ago.
It closed 21 shops in the first half of the financial year alone – while opening two new stores, and expanding two existing ones.
The company said it is planning to spend about £6 million this year on renovating shops that it wants to convert to a newer format – with the aim of running 260 shops in total.
Consumer confidence continues to be low, Shoe Zone said, indicating that shoppers have continued to cut back spending amid tougher economic conditions.
Meanwhile, the company is expecting to face higher business costs over the second half of its financial year due to national insurance contributions increasing from April and national living wage costs going up.
Nevertheless, the chain reported sings of improved conditions in more recent months, with shipping costs coming down and the value of the pound strengthening against the US dollar.
It is expecting to report a pre-tax profit of £5 million for the year – having previously been slashed from a forecast of £10 million.
Russ Mould, investment director at AJ Bell, said: 'Shoe Zone has swung from a profit to loss, the dividend has been scrapped, and the outlook remains gloomy amid low consumer confidence.
'Investors are voting with their feet by kicking the shares out of their portfolio.'
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