Government-imposed cost increases impact retailer’s profits

  • Shoe Zone reports a decrease in profits before tax to £9.6m from £11.3m the previous year
  • Increasing business rates attributed to government-imposed cost increases
  • Revenue increased by 0.9% to £162m compared to £160.6m in 2018
  • Product gross margin maintained at 62.7% with earnings per share decreasing to 11.4p from 19.0p
  • Digital revenue growth of 9.2% to £10.6m
  • 21 Big Box store openings, totaling 45 by the end of December contributing £15.6m in revenues
  • CEO Anthony Smith: Town Centre renewal is a key focus for the refreshed strategy
  • Plans to convert 20 traditional stores to premium Town Centre Hybrid model in 2020
  • Smith disagrees with ‘death of high street’ doomsayers, acknowledges rates increase from 26.4% in 2009 to 54.3% in 2019

Shoe Zone, the UK-based footwear retailer, has reported a decrease in pre-tax profits to £9.6 million for the year ended October 5, 2019, down from £11.3 million the previous year. The company attributes this decline to government-imposed increases in operating costs, particularly the impact of rising business rates. Despite the challenges, Shoe Zone managed a 0.9% increase in revenues to £162 million compared to £160.6 million in 2018. Product gross margin remained at 62.7%, while earnings per share fell to 11.4p from 19.0p in the same period. The retailer also saw a 9.2% growth in digital revenue, reaching £10.6 million. In the past year, Shoe Zone opened 21 Big Box stores, bringing the total count to 45 by December, contributing £15.6 million in revenues. CEO Anthony Smith stated that town centre renewal is a crucial part of their updated strategy and plans to convert 20 traditional stores into premium Town Centre Hybrid models in 2020. Despite facing challenges, Shoe Zone remains optimistic about the future of high street retail.

Factuality Level: 8
Factuality Justification: The article provides accurate information about Shoe Zone’s financial performance, including revenue growth, profit decrease, and the impact of increasing business rates on their operating costs. It also includes quotes from the CEO discussing their strategy for future growth and expansion. The information is presented in a clear and concise manner without any significant issues related to digressions, misleading statements, or personal opinions.
Noise Level: 3
Noise Justification: The article provides relevant information about Shoe Zone’s financial performance and the impact of increasing business rates on its profits. It also mentions the company’s plans for future growth strategies. However, it lacks in-depth analysis or exploration of broader economic trends or consequences for other businesses.
Financial Relevance: Yes
Financial Markets Impacted: Shoe Zone’s profits and business operations
Financial Rating Justification: The article discusses Shoe Zone’s financial performance, including decreased profits, changes in revenue, and plans for store expansion. This directly pertains to the company’s financial situation and its impact on the retail industry.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the text.

Reported publicly: www.retailsector.co.uk