Accent Group’s profits have slumped 59 per cent as the nation’s largest footwear retailer is hit by Covid-19 disruptions

Accent Group, owner of stores like Athlete’s Foot and Platypus, has seen its bottom line more than halve as Covid-19 disruptions dented trading.

Accent Group, whose footwear chains include Platypus, has suffered a 59 per cent slump in full-year profit caused by Covid-19 disruptions and one-off restructure and rental charges. Picture: Evan Morgan

Accent Group, the nation’s largest footwear retailer through its chains such as Platypus, Hype and The Athlete’s Foot, has seen its full-year profit slump by more than half as the disruptions caused by Covid-19 and one-off restructuring charges sank its bottom line.

The volatility to trading and shopping trends between January and July 2022 as the Omicron wave came and went saw Accent robbed of $95m in sales for the first half alone.

The footwear specialist had issued two profit downgrades since January, the latest in July, as traffic at its stores had yet to rebound late into 2022 but a trading update provided with its financial results on Friday signalled that trading had improved since the start of fiscal 2023.

Accent, which has 762 stores, said trading conditions for the first seven weeks of 2023 had been positive, driven largely by undisrupted trading conditions and supported by full deliveries of new product.

Accent said total sales are up 48.9 per cent in those first weeks reflecting the positive trading conditions, and like-for-like sales for the first seven weeks up 18.9 per cent on the prior year with margins also improving.

On Friday Accent reported that full-year revenue for 2022 rose 13.8 per cent to $1.129bn as profit fell 59.1 per cent to $31.464m. In a year dominated by store closures, Covid-19 restrictions and shoppers keeping away from shopping centres, there was a switch to online shopping with Accent’s online platform posting a 25.7 per cent leap in digital sales

The 2022 results includes one-off non-cash charges of $7.7m, $5.2m relating to the transition out of its PIVOT branded stores and $2.5m relating to store lease assets in a small number of stores where customer traffic levels have still not recovered.

Accent’s pre-tax earnings for 2022 of $62.3m was at the upper end of revised guidance in July when the retailer warned of a poorer performance for its business and was targeting EBIT in the range of $61m and $63m.

Accent chief executive Daniel Agostinelli said the operational disruption experienced in the 2022 year, and the associated impact to the financial results, had been well reported.

“In the context of the operational challenges and focus that was required to manage the day-to-day business, I am very pleased with the continued progress in executing our growth plan initiatives.”

The retailer opened 139 new stores during the year and closed 15 stores where more favourable rent deals could not be reached with landlords.

A final dividend of 4 cents per share was declared, up from 3.25 cents per share, and will be paid on September 15.

Accent’s future growth initiatives will be driven through new retail offerings under Stylerunner and Glue Store with the company aiming to achieve market share growth in the $6bn-plus performance and lifestyle market segment in Australia and New Zealand.

However, there will still be challenges to the business and the sector from the volatile economic conditions.

“Management recognises that there is some uncertainty in both the economic outlook and global supply chain,” Mr Agostinelli said.

Shares in Accent ended up 16.5 cents, or 10.96 per cent, at $1.67.