13th Jan 2016 08:51
LONDON (Alliance News) - Shoe Zone PLC on Wednesday reported a fall in pretax profit in its recently-ended financial year, as revenue declined in what it described as a difficult year for the footwear industry.
The value shoe retailer said its pretax profit in the year ended October 3 fell 3.4% to GBP10.1 million from GBP10.5 million the year before, as revenue declined 3.5% to GBP166.8 million from GBP172.9 million.
It said revenue fell due to the planned closure of loss-making stores, as well as difficult trading conditions in the first half of the year caused by warmer-than-expected weather.
Shoe Zone is working to open more of its larger 'Grade 1' stores and close smaller 'Grade 3' stores, planning for its 56 new Grade 1 stores to be operational by the beginning of February. It will also trial what it calls 'Project Big Box' in August, which involves three stores twice the size of an average Grade 1 store. The trial stores will sell an extended product range and higher priced footwear and will be located out of town.
"This trial will create a strong avenue for new growth outside of Shoe Zone's traditional portfolio," Chief Executive Anthony Smith said in a statement.
Shoe Zone will pay a final dividend of 6.5 pence per share, resulting in a total dividend for the year of 9,7p, plus a special dividend of 6.0p.
On current trading, Shoe Zone said the first quarter of the new year has been challenging but that its stock position is well-controlled, while it has achieved strong gross margins by choosing not to discount stock before Christmas.
Capital expenditure in the current year will increase to around GBP3 million from the prior GBP2 million expectation to allow for increased investment in stores, warehouse and IT.
Shares in Shoe Zone were trading up 12% at 187.00 pence on Wednesday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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