A rough economic environment, coupled with increased costs, are taking their toll on this large British shoe retailer, which reported a pre-tax and net loss of £6,745,000 (€9.9m-$11.9m) for its 1st half ended July 30, as compared to a £2,441,000 (€3.6m-$4.3m)loss in the same period last year. Its turnover fell by 5.8 percent to £100.1 million (€147.2m-$176.4m), representing a decrease of 9 percent in same-store sales for the period. Management blamed the loss on a difficult retail environment, compounded by higher store rental fees, increased minimum wage levels and ballooning energy prices.
The tough business climate in the UK has led the company to manage its stock levels more stringently, which helped reduce markdowns and surplus inventory. Stylo says it achieved a slightly higher product margin in the 1st half first half, as compared with the previous year, but the income statement shows a big decline in the gross profit and a higher operating loss of £5,099,000 (€7.5m-$9.0m) for the period.
The group increased the volume of shoes it sold by 13.9 percent to 7.4 million pairs in the 6-month period, assisted by growth in the group’s discount-oriented PriceLess chain, but this resulted in a 5.7 percent rise in distribution costs. No details were given in the interim statement about other chains of the group such as Barratts on Shellys.
Management is hesitant to comment on what the rest of the year will be like, but says it will maintain pressure on costs and stock levels with suppliers to help guarantee effective sales.