Shoe Zone has posted a decline in both revenue and profit as weak consumer demand and rising costs impact the budget footwear retailer during a revamp of its physical stores.

For the year ending 28 September, revenue fell by 2.7% to £161.3m, down from £165.7m in the previous year.

Pre-tax profit at the retailer dropped 42% to £9.5m, attributed to unseasonably wet weather and year-on-year increases in costs related to energy, depreciation, the National Living Wage, and container prices.

The company’s share price also took a hit, dropping over 10% in early trading, with an overall decline of nearly 19% in the past month and over a third this year.

However, it noted its key three weeks of “back to school” trade in August and September were positive and ahead of the same period last year.

The footwear retailer is currently undergoing a store revamp, resulting in a reduction of 26 locations, bringing the total to 297. Over the year, Shoe Zone closed 53 stores, opened 27, and refitted 28.

Shoe Zone chairman Charles Smith said: “A year of two halves, with the first half trading in line with expectations and ahead of the previous year, however, the second half trading was below expectations due to unseasonal weather conditions, particularly at peak summer, however, our key Back to School period traded above expectations at the end of the year.

Our digital business continued to grow, driven by the introduction of free next day delivery for all shoezone.com orders.”

Back in March, it warned that it was trading below expectations due to higher-than-expected costs related to disruption in the Red Sea and slow trading over the autumn season.

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