// Shoe Zone posts loss after tax of £14.6m for the 52 weeks to October 3, 2020
// Sales drop 24.3% to £122.6m
// Shoe Zone welcomes Terry Boot to replace Peter Foot as new finance boss
Shoe Zone has recorded a loss after tax of £14.6 million and a 24.3 per cent drop in sales to £122.6 million as it struggles with the impact of lockdown store closures.
For the 52 weeks to October 3, 2020, the retailer’s product gross margin finished lower at 61.4 per cent, while its net cash position was £6.3 million.
Amid the sales decline, Shoe Zone has drafted in Terry Boot to replace Peter Foot as its new finance director with immediate effect.
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Boot was previously working as chief executive of jewellery buying group The Company of Master Jewellers.
“We are confident that Terry’s considerable experience will strengthen the board,” Shoe Zone chief executive Anthony Smith said.
Foot stepped down from his role in February after seven months with the business.
Meanwhile, Smith said Shoe Zone’s decline in trading is due to temporary store closures as England remains in a third lockdown – with the first phase of restrictions lifted today.
“In my second year back as chief executive, it is disappointing I am reporting on a year impacted by Covid-19,” Smith said.
“Despite this, there are positives such as the continued growth of digital and the commitment and focus of our loyal employees.
“The financial pressure caused by Covid-19 has meant we now have debt on the balance sheet for the first time in over 15 years.”
Shoe Zone said that up to the end of December 2020, it had opened 51 new big-box stores and closed 50 older stores.
The retailer said big-box stores accounted for 14.3 per cent of all turnover during the period.
The retailer also reported that digital sales grew 82 per cent to £19.3 million, while it had slashed average lease lengths to two years and driven rents down 30.9 per cent, saving the business £770,000.
Smith said the rollout of the retailer’s big-box stores had been suspended due to the financial pressures caused by the pandemic.
Shoe Zone is expecting a “a winter stock overhang” of £7 million that it would be unable to address until autumn 2021.
“We do not expect profits will return to pre Covid-19 levels for the foreseeable future,” Smith said.
“Lockdown in November and January to mid-April so far in this financial year makes a return to profit extremely unlikely until the financial period ending on October 2, 2022, at the earliest.”