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Shares in AIM-listed shoes and streetwear retailer Footasylum (LON:FOOT) plunged by 50% to 42p (as of 12:00 BST) after the company warned that there had been no recovery on the UK high street during July and August. While online and wholesale performance has been positive, shop sales have disappointed and this has been exacerbated by delayed store openings and improvements.
Management warned that full year revenues will now be below market expectations and that adjusted EBITDA will be less than half of its 2018 level of £12.5 million.
Executive Chairman Barry Brown said that: “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. 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.
“Despite the challenging outlook, we are encouraged by the continuing progress that we are making in improving our online performance, rolling out our store opening programme, and further enhancing our supplier relationships, and therefore remain confident in the Company’s long-term prospects.”