Shoe Zone trading update shows growing strength
Budget footwear retailer Shoe Zone issued what must be one of the shortest trading updates ever on Wednesday with just a few lines that nonetheless contained good news.
It’s worth publishing it in full: “Shoe Zone is pleased to announce that since the publication of its interim results in May, the business has been trading well and has also seen strong margin improvements and cost savings, in particular as a result of rent reductions and good supply chain management, which are expected to continue into Q4 of the company's financial year for the 52 weeks to 2 October 2022. As a result, the company now expects adjusted profit before tax for FY2022, to be not less than £8.5m.”
That was undeniably upbeat and encouraging news given the challenges the company has faced in recent years and the fact that even though its shoes sell at very low prices, there has been uncertainty about whether it would be hit by its customers reining in their spending in the face of the cost of living crisis.
Given its pricing, the company’s customers tend to be on lower incomes than many in the UK and in that situation, even an inexpensive pair of shoes can be a commitment too far when there are other issues such as energy bills rising, a car petrol tank that needs filling and a family to feed.
Of course, the company could also be benefiting from shoppers who might usually buy from more expensive brands trading down to cheaper prices.
And as it has an extensive portfolio of 388 stores across the UK in town centres and retail parks, plus its webstore, it has plenty of visibility country-wide as shoppers assess their footwear needs and what they’re prepared to spend.
Back in May, the company reported improved results and said it’s accelerating store relocations and refits. It wants to double its Big Box location numbers to approximately 100 and increase Hybrid stores to 200 in the medium term. And it’s further investing in digital too.
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