Britain’s largest shoe retailing group came out with a net profit of £4,168,000 (€6.22m-$7.58m) for the year ended last Jan. 29, as compared to a loss of £5,510,000 in the previous year, thanks mainly to a higher gross margin of 11.8 percent and to reduced costs. The operating margin before exceptional items improved to 2.9 percent. Average borrowings declined.
At £236.8 million (€353.4m-$430.8m), total sales were only 1.8 percent higher than in the previous year, partly due to the closure of 118 unprofitable concessions in Dorothy Perkins stores. Stylo is paying higher commissions on the 197 remaining Perkins concessions and it’s putting to an end a brief stint with 53 concessions within British Etam stores.
Sales were flat overall throughout the group, but Stylo’s discount retail division, PriceLess, again recorded strong increases in absolute terms and on a same-store basis, generating the bulk of the group’s profits, and the progress is expected to continue this year and in the medium term. A further 30 PriceLess stores and five new Barratts stores are planned for this year.
In the past year, Stylo converted 45 Barratts units to the PriceLess format and opened 12 new PriceLess stores, bringing the chain up to 174 locations. After three closures, the Barratts chain was reduced to 192 doors. Shellys, the more lifestyle-oriented chain of 11 stores, continued to make a loss, but its Oxford Circus and Birmingham units are being remodeled and it should make a profit again this year.
While reporting on a difficult retail climate at the moment, the management reiterates its plan to open up to 100 new stores in the next couple of years – mostly under the PriceLess banner - provided that market conditions justify the investment and that suitable sites can be found.