Shoe Zone shuts down 20 stores, cuts HQ jobs amid £2.5m half-year loss

Shoe Zone reports £2.5m loss for half year to April
Speaking in light of the coronavirus pandemic, Shoe Zone chief executive says "the impact is likely to continue to be felt for several years."
// Shoe Zone CEO says impact of coronavirus will be felt by retailer “for several years.”
// Revenue fell 6% after impact of Covid-19 while online sales rose by almost a third
// Shoe Zone shuts down 20 stores and cuts jobs at head office to reduce costs

Footwear retailer Shoe Zone has revealed it made a loss before tax of £2.5 million in the six months to April 4, while also announcing store closures and head office job cuts.

Revenue fell six per cent to £68.9 million for the period, although online sales rose 32 per cent to £6.5 million.

Since March 24 all 470 Shoe Zone stores have been closed due the coronavirus lockdown, and last week 415 of them reopened in line with government guidelines.

READ MORE: Shoe Zone cancels final dividend & warns of Covid-19 impact

The retailer’s Welsh and Scottish stores will reopen on June 29.

In an interim update this morning, Shoe Zone said it had seen revenue rise 2.6 per cent in the year to February 2020.

The retailer said that in light of the coronavirus pandemic, “immediate action” had been taken to reduce its cash outflows and negotiate with landlords and suppliers.

This included the permanent closure of 20 stores and head office job cuts.

Shoe Zone added that it had furloughed the majority of its employees and utilised government tax deferment schemes.

The business said it would continue a review of the viability of all stores after lockdown ends.

“Covid-19 will continue to have an unprecedented impact on the UK economy and the retail industry,” Shoe Zone chief executive Anthony Smith said.

“Whilst the group has taken all possible steps to ensure that the business will survive through the crisis and continue into the future, the impact is likely to continue to be felt for several years.

“As a result of this and following an extensive review of the store portfolio Shoe Zone has closed an additional 20 stores during lockdown and will only open 470 when permitted.

“The group has also taken immediate action to reduce costs at head office and pause all areas of discretionary spend.

“Negotiations with landlords have also been accelerated and supplier orders reduced, cancelled or deferred as far as possible.”

Speaking on Shoe Zone’s increased losses, from £1 million in the first half of 2019 to £2.5 million for the first half in 2020, Smith underlined that repaying debt is now the priority.

“Cash remains the key focus for the business and as stated on the 29 April 2020, the immediate focus will be on rebuilding cash balances to a higher level than previously carried and repaying the debt taken on as part of the CBILS scheme whilst fulfilling other statutory obligations,” he said.

In April, Shoe Zone announced it had scrapped its final dividend for the year to October 5 as turnover for the six months to March 31 took a hit due to the lockdown.

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