Footasylum has issued a profit warning as margins are set to miss forecasts due to the higher-than-expected levels of discounting during the Christmas period.

The footwear retailer said it was cutting costs due to tough trading conditions, although total revenue went up by 14 per cent to £102.3 million in the 18 weeks running up to December.

Online sales rose 28 per cent and revenue from in-store sales was up five per cent at £63.7 million.

“In the context of the current tough conditions on the High Street, we are encouraged to have delivered revenue growth across all of our channels and major product categories, with online and wholesale continuing to perform particularly well,” said executive chairman Barry Bown.

“However, the short-term outlook is undeniably challenging, and we continue to maintain our focus on cash, working capital and inventory management, as well as reducing costs across our operations,” he continued.

“The current trading conditions have led to significant discounting and promotional activity across the sector, and this in turn has impacted our gross margin expectations for full-year 2019.”

At the start of September, Footasylum warned of full-year adjusted earnings coming in at less than half of the previous year’s £12.5 million figure, due to lower gross margin and higher costs from investment in operations.

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

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