Shoe Zone, the U.K.'s largest discount shoe retailer, made massive investments in its store portfolio in the last financial year. It closed 35 loss-making units, opened 21 stores and refitted 29, bringing its portfolio to 496 in the U.K. and Ireland. The management said that the remaining loss-making stores now make up only 6 percent of the Shoe Zone portfolio, down from 11 percent three years ago.

The company earlier warned that the planned closures would take a toll on its results. In fact, the results published for the full year ended last Sept. 30 show a 7.3 percent drop in pre-tax profits to £9.5 million (€10.7m-$12.9m). This rationalization plan also contributed to a 1.2 percent dip in revenues for the 52-week period, down to £157.8 million (€178.2m-$213.0m). In addition, the results were hit by a drop of more than 10 percent in the value of the pound in the course of the year, due to a combination of the Brexit vote, the strong euro and Donald Trump's election as U.S. president.

The British shoe retailer maintained key price points for its core discounted lines and improved the average transaction value by 3.3 percent. E-commerce revenues increased by 34 percent last year, making 5.3 percent of total sales.

In addition, non-core, non-footwear ranges continued to improve and now generate 14.5 percent more sales compared with the prior period. Shoe Zone also increased its direct sourcing so that footwear orders placed directly with overseas factories increased to 84.7 percent of total footwear orders in the full year, up from 72.2 percent the year before. As a result of all these actions, the product gross margin of the British retailer improved by 1.2 percentage points to 63.2 percent.

The company launched its format in the U.S. during the past year and is already operating in Continental Europe through the Amazon Marketplace. Meanwhile, its “Big Box trial” has continued to perform well in the U.K. The stores tend to be located in retail parks and are on average double the size of many of its urban stores. Shoe Zone now has 12 Big Box stores in operation and is aiming to add ten per year.