Footasylum expects to report full-year adjusted earnings at less than half of last year’s £12.5 million figure, due to lower gross margin and higher costs from investment in operations.

In its first announcement after listing on the London Stock Exchange’s AIM market in 2017, the footwear and apparel retailer reported lower overall gross margin due to a higher amount of clearance activity in stores.

In terms of trading performance for the six months ended 25 August and looking forward to the year ending 23 February 2019, Footasylum expects to report revenue of £98.6 million for the period, an increase of 18.5 per cent compared to £83.2 million during the corresponding period last year.

Store revenue was up 12.4 per cent to £66.3 million - from £59 million during the first half of 2017 - while online revenue grew 28.5 per cent to £30.2 million, up from £23.5 million during the same period last year.

Whilst trading since the beginning of the current financial year has been impacted by weak consumer sentiment on the High Street, the company's store performance for May and June was positive, read the statement.

“However, store performance during July and August was more challenging which, in the context of there being no sign of a recovery in the short-term on the High Street, has led the board to reassess its overall expectations for the balance of FY19.

“While online and wholesale revenue continues to perform strongly year-on-year, store sales have been disappointing, which has been exacerbated by some unforeseen delays in the company's new store openings and upsizes,” continued the statement.

Footasylum has 66 stores in the UK. The company committed to investing in its estate ahead of peak trading, including the delivery of several technology projects. Reflecting this investment, capital expenditure is expected to increase in the medium-term, peaking at around £16 million next year.

Barry Bown, executive chairman of Footasylum, commented: “These are undoubtedly challenging times in the retail industry and, in common with many other businesses, Footasylum's trading has continued to be impacted by weak consumer sentiment.

“On top of that, increased clearance in stores has led to a reduction in gross margin, and we have also had some unforeseen delays in our new store openings and upsizes,” he continued. “However, we have continued our programme of investment, both in upsizing our stores and in our digital capabilities, and are working hard on a number of initiatives to maximise the company's performance during the upcoming peak trading period.”

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