The shoe retailer said it will close up to 45 stores by April 2021 in a move that will create “numerous” redundancies, amid poor trading results and local lockdowns restricting footfall.
Shoe Zone’s generated revenues for the 52-week period were approximately £39m less than the previous year at £122.6m (2019: £161.9m).
As a result of closing its retail stores from 23 March 2020 to 15 June 2020, Shoe Zone said it expects to report a pre-tax loss for the period of between £10m and £12m.
In light of the “challenging trading conditions”, Shoe Zone closed its financial year with a net cash balance of £6.3m, a decline from last year’s results of £11.3m.
Shoe Zone ended the year with 460 stores, having opened 10 Big Box stores and closed 40 stores during the period due to both the pandemic and local lockdown restrictions.
The company said no dividend will be paid in relation to FY20 as debt repayment is now being “prioritised” by its board.
In addition, Shoe Zone stated pension funding has been agreed on with the pension trustees up until the next “triennial valuation” in March 2022. It is expected that “additional funds will be needed” for one of the legacy pension schemes.
The board reported it is not anticipating Shoe Zone will be in a position to “restart its dividend policy” until at least the 2024/25 financial year.
All future new openings are reportedly “on hold” until trading conditions improve, whilst a small number of essential “relocations” will happen as needed.
Anthony Smith, CEO of Shoe Zone said: “Shoe Zone has ended an incredibly challenging year with a robust plan and sufficient funding in place to ensure the future survival of the business.
“However, it is very difficult at this stage to provide meaningful guidance on the future outlook, given the material uncertainty in the wider economy.”
Shoe Zone said it will announce its final results for the period ended 5 October 2020 on Wednesday 13 January 2021.