Shoe retailer Stylo today posted a 39% rise in half-year losses to £4.6m and said sales in its important second half had got off to a weak start.
Stylo, which owns the Barratts, Bacons, Saxone, Shellys and PriceLess shoe brands, said the costs of buying Shellys in April and of revamping warehousing and distribution had caused the rise in bottom line losses in the six months to 2 August.
The company said extra pension costs, economic uncertainty surrounding the Iraq conflict and increased concession commission costs had also contributed.
Stylo said sales in the second half, which is traditionally better than the first half, had begun slowly.
Chairman and chief executive Michael Ziff added that the future benefits from Shellys would be unlikely to materialise in the results until 2004.
Bradford-based Stylo makes shoes and sells them in 361 of its own stores and 314 concessions throughout the UK.
It employs around 2,500 people.
It said trading in its Barratts division had been below expectations, primarily due to a lack of depth of seasonal product.
Since the group acquired Shellys for £1.5m, turnover in the division has broadly met expectations, although a large amount of surplus stock and delays in placing orders for the autumn season have affected margins.
Stylo said it has been addressing the stock surplus with an aggressive and ongoing clearance programme.
It added that it had put a new management team in place to take the business forward.
Ziff said: “Shellys has very strong brand recognition and design capability and we remain confident that the business will be an important contributor to group profits in the coming years,” Ziff said the group’s PriceLess discount shoe arm had continued to grow and had achieved excellent results.
But changes in distribution arrangements and the underperformance of the group’s distribution centre had adversely affected trading in PriceLess and Barratts.
Losses before tax and exceptional items were slightly lower than the previous year at £2.9m, against £3.4m previously.
References: EGi News 16/10/03
