Footwear Retailer Struggles Amidst Brexit Uncertainty and Rising Costs

  • Schuh reports a £7m fall in pre-tax profits
  • Turnover drops by over £20m to £288.4m
  • Online sales increase, but store sales drop
  • Increasing costs and Brexit uncertainty impact business
  • Shuts down German stores, hires retail property consultant CAPA

Schuh, the footwear retailer, has reported a £7 million drop in pre-tax profits to £6.1 million due to difficult trading conditions for the second consecutive year. The company’s turnover fell by over £20 million to £288.4 million despite an increase in online sales. David Gillian-Reid, finance and HR director of Schuh, cited factors such as increasing occupancy rent, rates, service charges, staff costs (including minimum/living wage, apprenticeship levy, pension auto enrolment), Brexit uncertainty, and lower consumer spending on footwear and apparel. The retailer has closed all its German stores and hired retail property consultant CAPA to help reduce occupancy costs across the store estate. Despite these challenges, Schuh remains optimistic about its future with engagement from landlords and internal efforts.

Factuality Level: 8
Factuality Justification: The article provides accurate information about Schuh’s financial performance, including a decrease in pre-tax profits and turnover, as well as mentioning challenges faced by the company such as increasing costs and Brexit uncertainty. It also mentions the closure of German stores and hiring a retail property consultant to reduce occupancy costs. However, it lacks some details about online sales growth and does not include personal opinions or biased statements.
Noise Level: 6
Noise Justification: The article provides some relevant information about Schuh’s financial performance and challenges faced by the company, but it could benefit from more context and analysis of the broader retail industry trends or potential solutions to address these issues.
Financial Relevance: Yes
Financial Markets Impacted: Schuh’s financial performance impacts the company’s stock value and may affect other retail companies in similar situations.
Financial Rating Justification: The article discusses a decline in Schuh’s pre-tax profits and turnover, which is related to financial topics. Additionally, it mentions challenges faced by the retail industry and the impact of Brexit uncertainty on consumer spending, which can have an effect on financial markets and other companies in the sector.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: While there are challenges mentioned, they are not considered extreme events as they are related to business operations and economic conditions rather than natural disasters, financial crises, political instability, etc.

Reported publicly: www.retailsector.co.uk