Shoezone reports profit decline amid challenging fiscal environment

UK-based footwear retailer Shoezone has reported a significant reduction in profitability for the financial year, citing a downturn in consumer confidence following the October 2024 budget and adverse fiscal policies. Profit before tax fell to 3.3 million pounds (4.4 million dollars) from 10.1 million pounds in 2024, while adjusted profit before tax reached 2.4 million pounds.

Total revenue declined by 7.6 percent to 149.1 million pounds, influenced by a reduction in the store estate as the group traded out of 28 fewer locations than the previous year. Discretionary spending remained subdued, although the retailer noted strong performance during specific peaks such as the back-to-school period and the summer season.

Digital growth and infrastructure investment

In contrast to physical retail trends, digital revenues grew by 2.3 percent to 36 million pounds. This growth was supported by the introduction of free next-day delivery on all Shoezone.com orders and robust sales through Amazon. The company continued to invest in its digital platform, benefiting from a new mobile app and improvements to its distribution centre conveyor system which enhanced throughput speed.

Shoezone ended the period with 269 stores, having closed 39 locations and opened 11 new larger-format outlets. The retailer’s strategy to transition to larger-format stores remains on track for completion by the end of 2027. Shoezone intends to operate approximately 260 stores by that time, with all original smaller formats either refitted, relocated, or closed. For the upcoming year, the company plans to invest approximately 4.5 million pounds in 23 store projects and IT infrastructure.

Trading conditions remained challenging in the first quarter of the new financial year, with footfall on the high street continuing to decline. Management expects profit before tax of approximately one million pounds for the financial year ending October 3, 2026, as recent government budget measures further increase the company's cost base.