Lockdown 2 costs shoe retailer at least £12m
CHAIN HAS ALREADY ANNOUNCED CLOSURE OF ONE IN FIVE STORES
RETAIL chain Shoe Zone expects to suffer a £12 million-plus hit from the latest national lockdown.
The business, which has its head office in Humberstone Road, Leicester, said that the current four-week lockdown had affected it at a critical time of year in the run-up to Christmas.
Its new financial year, which started in early October, would be millions of pounds down, it said.
However, the business can start planning the reopening of its stores from next week.
Even in the most severely restricted Tier 3 areas, including Leicester and Leicestershire, non-essential shops will be able to open.
A month ago, the business said it was considering getting rid of 20 per cent of its store estate, putting hundreds of jobs at risk.
Chief executive Anthony Smith said he planned to close 45 shops within the next five months and a further 45 over the following year.
Shoe Zone has already shut 40 shops this year, but opened 10 out-of-town Big Box stores, taking the total number of new-style bigger retail park stores to 50.
The business employs 3,000 people and even before the second lockdown warned sales from its 410 shops were down a fifth since they reopened the first time in June.
Even a doubling of online sales had failed to fill the gap, with pre-tax losses of more than £10 million expected for the last financial year.
In a statement, Shoe Zone said: “As should be expected, the second lockdown in England, at a critical time of year, will have a negative impact on the group’s revenue, resulting in an anticipated reduction in revenue of at least £12 million compared to the year ending October 5, 2020, even allowing for the good gains in online trade.
“The very late lockdown in certain areas of Scotland and all of Northern Ireland has further exacerbated the impact on our pre-Christmas trading.
“Notwithstanding this anticipated reduction in revenue, the group continues to have a material net cash balance sheet position, and the board continues to anticipate that the group has sufficient liquidity available to it, assuming there are no further material Covid-19-related restrictions mandated by the government over and above those already known.
“It is very difficult at this stage to provide any further meaningful guidance on the future outlook, given the material uncertainty in the wider economy.”