Shoe Zone returns to profit after shutting stores

Shoe Zone has swung back to profit for the past year after shuttering loss-making stores.

The discount shoe retailer saw shares shoot higher on Tuesday morning after it hailed recovering sales and profitability following the impact of the pandemic.

The company posted £9.5 million pre-tax profits for the year to October, swinging from a £14.6 million loss a year earlier.

It came after the group closed around 50 unprofitable stores during the year, bringing its portfolio to 410 sites.

Shoe Zone told shareholders it has also been boosted by the opening of new “big box and hybrid” format stores from its original smaller formats.

It said the move has seen the business relocate to better locations and enable the firm to stock a greater range of styles.

The company currently has 51 “big box” larger format stores and plans to expand this to 100 sites.

Sales at the retailer over the year dipped by 2.8% to £119.1 million after it was affected by lengthy periods of enforced closures.

It said the closures were partly offset by a jump in digital revenues, which leapt to £30.5 million from £19.3 million in the previous year.

Anthony Smith, chief executive of the retailer, said: “Shoe Zone had a very successful year due to the incredible hard work of our teams, by reducing costs, reducing non-essential capital expenditure, continuing to accelerate investment in our digital business alongside improving and streamlining operations.

“The decision to invest in our digital infrastructure and operations has led to significant growth in online sales over the last 12 months, giving us the going to continue investing in our people and our shoehub platform.

“We aim to increase drop ship partners, market places, exclusive products, brands and plan to introduce additional payment and delivery options to enhance customer experience.”

Shares in the company rose by 18.6% to 140p in early trading.