Budget footwear retailer Shoezone suffered a slump in profit last year after it was forced to take a £2.9m hit on the value of 17 properties.
Statutory profit before tax dropped from £9.6m to £6.7m after the company reported a £2.9m writedown on the value of 17 freehold properties.
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Underlying profit before tax slipped from £11.3m to £9.6m, due to rising operating costs related to new stores openings and an increase in minimum wage.
Revenue increased 0.9 per cent to £162m in the 53 weeks to 5 October.
The company announced a final dividend of 8p, flat on last year.
Why it’s interesting
Shoe Zone said it reassessed the value of its freehold property portfolio to “reflect the current retail property environment”.
The company opened 24 stores in the period, and closed 16, bringing its total number of branches to 500.
Of the new stores, 21 openings were the continued roll out of Shoe Zone’s out-of-town Big Box format, two were standard high street branches and one was a hybrid between the two.
The Big Box portfolio added £15.6m in revenue and £1.5m of profit during the year.
What Shoe Zone said
Shoe Zone chief executive Anthony Smith said: “Despite it being a difficult year for Shoe Zone, the business has achieved revenue growth, and delivered underlying profit before tax marginally ahead of our revised expectations following our revaluation of freehold property.
“Alongside the continued momentum in Big Box expansion and Digital growth, Town Centre renewal is the third key focus for our refreshed strategy. Following a successful trial of four Hybrid stores, in 2020 we plan to convert a further 20 of our traditional stores to this more premium Town Centre Hybrid model.”