Tuesday 21 May 2019 8:31 am

Falling rents help Shoe Zone walk to a profit in tough time for high street


Reporter covering economics and markets. You can send me stories or get in touch at harry.robertson@cityam.com

Reporter covering economics and markets. You can send me stories or get in touch at harry.robertson@cityam.com

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Falling rents helped UK value footwear retailer Shoe Zone hold steady in its interim half-year results, released today, in a tough trading environment.

Read more: Shoe Zone shares soar as retailer posts record profits

The figures

The company’s profit before tax rose marginally to £1.02m in the half year ended 30 March, compared to £955m a year earlier.

Shoe Zone’s revenue fell to £73m from £73.6m in the first half of 2018.

Its net cash flows from operating activities rose to minus £1.2m from minus £1.3m the year before. Shoe Zone had no bank debt.

The firm’s earnings per share fell to 1.65p in the first half from 1.70p in 2018.

Shoe Zone’s interim dividend was maintained at 3.5p per share.

Why it's interesting

The company, long a fixture on the British high street, saw its rent on renewals fall by 18.5 per cent in the first half, equivalent to a full year saving of £334,000.

Digital sales increased by 4.9 per cent to £5m from £4.8m a year earlier as the store branched out from its bricks and mortar operations.

Shoe Zone’s 26 spin-off Big Box stores generated £5.5m of revenue in the first half, a relatively small percentage of the total.


The company said it will be operating 33 Big Box stores at the end of May, and 45 by the end of 2019.

Shoe Zone said it has a “positive outlook for the rest of the year,” largely due to its “refreshed digital strategy”.

What Shoe Zone said

Nick Davis, chief executive of Shoe Zone, said: “The first half of our financial year has been positive for the group, trading in line with management's expectations and achieving profitable revenue growth in our two key growth areas of digital and Big Box.”

Read more: Full year profit falls at Halfords in 'challenging' retail environment

“Trading momentum has continued into the second half, in line with market expectations. With our growth strategy in place, we believe we are favourably insulated against many of the structural sector issues and the Board continues to look to the future with confidence,” he said.

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