Families looking for a bargain in the cost-of-living crisis have helped boost sales at the low cost Shoe Zone chain.
The Leicester-based business, which sells around 13 million pairs of shoes each year from its 360 shops, saw sales of £156.2 million in the year to last October 1, up from £119.1 million a year before.
Adjusted pre-tax profits were £11.2 million, up from £9.5 million in 2021.
Chief executive Anthony Smith thanked the staff for their “incredible hard work” through the first full year of trading post-Covid.
He said online sales contributed about one-sixth of all revenues, performing slightly worse than they did when more people shopped online during the pandemic.
He said during the year the business closed 63 shops and opened 13 new stores, taking the total to 360.
The business, he said, was also helped by average store lease lengths of just 1.8 years, giving it the “opportunity and flexibility to respond to changes in any retail location at short notice”.
During the year it achieved rent reductions on 48 lease renewals, worth £600,000, and an average reduction of 30 per cent.
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Mr Smith – who is part of the Smith family behind the business – said: “We ended the year with 45 big box, 44 hybrid [mid-sized] and 271 original stores.
“This year we expect to relocate or open a further 35 stores and continue to close a number of older stores, and we will refit a minimum of 15 stores to our new formats.”
Shoe Zone employs around 2,800 people and its average sales price is around £13.20.
Russ Mould, investment director at online stockbroker AJ Bell, said the business had prospered because shoes were essential items, even during a cost-of-living crisis.
He said: “That’s exactly what we are seeing with Shoe Zone which is enjoying rising sales and profit.
“Life is going so well that the company has restarted dividends and will also make an extra one-off payment to shareholders.
“Shoe Zone has become one of the go-to places for individuals looking to being kitted out with new footwear for work and parents wanting affordable school shoes for their children.
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“Interestingly, while demand is particularly strong, the company continues to close its weaker stores and right-size its estate. And when a lease is renewed, it is getting better deals.
“An average lease length of 1.8 years means it isn’t lumbered with stores if they aren’t generating the expected business, thus providing flexibility which many other retailers can only dream of.
“The outlook for Shoe Zone looks promising given widespread expectations of the country being in a recession during 2023.
“However, longer-term there is a chance that a stronger economy encourages people to be less cost-conscious when making retail decisions and more premium-priced retailers become in vogue for essential footwear.
“That’s always going to be a risk for Shoe Zone, but it will have seen this trend plenty of times before. If it can continue to streamline the business and get it running as efficiently as possible then it would be in good health at the point when competition increases once again.”