Footasylum has blamed “a difficult trading period” and an investment drive after its half-year trading update saw it swing to a loss despite growth in sales.
The footwear retailer recorded a pre-tax loss of £4 million in the 26 weeks to August 25, compared to the profit of £2.3 million it made in the same period last year.
Executive chairman Barry Bown attributed the slump not only on “lower overall gross margin from higher clearance activity in stores”, but also the “extensive investments that are being made to position the company for future growth”.
Despite this, revenue during the half-year period rose 19 per cent to £98.6 million, which was propped up by a 29 per cent surge in online sales.
Meanwhile, store revenue increased 12 per cent to £66.3 million and wholesale skyrocketed by 200 per cent to £2.1 million.
Footasylum also only opened one new store in first half period, bringing its total store estate to 66.
There are plans to open five more stores and upsize another five before the end of the second half.
“This has been a difficult trading period for Footasylum as we have contended with tough conditions on the high street and some delays in our programme of new store openings and upsizes ahead of the peak trading period,” Bown said.
“We are encouraged by the early results and trends that we are seeing from our investments in key areas such as digital and marketing and see substantial opportunity for further progress across these and other parts of our operations.
“In the longer term, we remain confident that the company’s differentiated, product-led, multi-channel proposition, combined with strong partnerships with core suppliers, will underpin our future progress.”