Footasylum takes a kicking after profit alert

Footasylum’s chief executive’s crown as the stock market’s youngest boss slipped last week and on Tuesday she saw its share price crash on a profit warning.

The footwear retailer said it wanted to plough cash into the business, including to open more stores, and the shares tumbled 46.8%, or 78.5p, to 89p. It floated at 164p a share in November.

Boss Clare Nesbitt, 31, was the youngest boss of a listed company until last week when 28-year-old James Ritchie took over as chief executive of offshore windfarms business Tekmar.

Nesbitt said the business will “absolutely not” swing into the red next year despite warning underlying profits will be more modest than in 2018. The youth-focussed chain made pre-tax profits of £1.9 million on sales of £194 million for the year to February 24. Its online sales accounted for 41% of the revenues, up 33%.

The business opened 10 stores over the period and plans to open up to eight more.

“The IPO gave us the cash to invest. There’s been a little bit of a margin hit, but we’re very happy with the performance,” added Nesbitt.

The chain, which sells its own brands and adidas and Nike, was set up by David Makin and John Wardle, who founded JD Sports. Makin and Wardle worked alongside the ex-boos of JD Sports, Barry Brown, who is now Footasylum’s executive chairman. Nesbitt is Makin’s daughter.

“Footasylum has disappointed the market with its guidance for 2019, which is a major surprise for a company so recently floated. Yes, external conditions are difficult but they aren’t impossible,” said retail analysts at Peel Hunt.