Shoe Zone has reported a pre-tax loss of £2.3 million for the six months to March 29, compared to a profit of £2.6 million a year earlier. Revenues fell 6.5% to £71.5 million, partly due to the closure of 31 shops over the past year, leaving 278 stores.
The retailer closed 21 shops in the first half alone, opening two new stores and expanding two existing ones. It plans to spend £6 million this year renovating shops to a newer format, targeting 260 stores in total.
Digital sales rose 6.4%, but consumer confidence remains low as shoppers cut back spending amid tough economic conditions. The company faces higher costs from increased national insurance and national living wage from April.
However, recent months have shown improved conditions with lower shipping costs and a stronger pound. Shoe Zone expects a full-year pre-tax profit of £5 million, down from a previous forecast of £10 million.
Russ Mould of AJ Bell commented: “Shoe Zone has swung from a profit to loss, the dividend has been scrapped, and the outlook remains gloomy amid low consumer confidence.” Shares fell by a fifth on the update.
