Newly-listed sports retailer Footasylum saw a sharp decline in its value as shares plummeted on Monday. The brand, which specializes in “athleisure” fashion, attributed the drop to weak consumer sentiment, resulting in more modest annual earnings for the next financial year.
Is Footasylum Another High Street Casualty?
Despite ruling out any chance of recovery on the high street, Footasylum plans to improve its website and expand its current stores, while investing in new store openings. The retailer stocks popular sports brands like Nike, Adidas, and Calvin Klein, as well as its own brand products. It was founded in 2005 by David Makin and John Wardle, who previously worked at JD Sports.
The announcement came as a surprise to many, given Footasylum’s solid results since going public in November 2017. The brand reported an 18.5% rise in sales and underlying pre-tax profits of £8.4 million for the year ending February 2018.
Blaming Weak Consumer Sentiment
However, Footasylum’s Chief Executive, Clare Nesbitt, cited the widely-documented weak consumer sentiment on the high street as the cause of the brand’s recent downturn. Despite its core target market of 16 to 24-year-old consumers being relatively resilient in a downturn, Footasylum’s trading has been impacted since the beginning of the new financial year.
The opening of new stores has also been hit by unforeseen delays, while clearing activity has affected profit margins. Shares have fallen to 40p, leaving the company valued at around £42m.