Shoe Pavilion reported in a filing with the SEC that net sales for fiscal 2007 increased 18.2% to $152.6 million from 2006 sales of $129.1 million. The sales growth is the result of increased sales of $7.6 million generated from 15 new stores opened in fiscal year 2007 and a comparable store sales increase of 0.6%, offset by a sales reduction of $2.5 million from 8 closed stores. The company opened 4 new stores in the first half of fiscal year 2007 and 11 new stores opened in the second half of fiscal year 2007.
As a percent of sales, gross profit decreased from 33.6% for fiscal year 2006 to 23.4% for fiscal year 2007. The 10.2% decrease in gross margin percentage resulted from the lower of cost or market inventory adjustment of 1.8%, the asset impairment charge of 2.0%, higher occupancy expenses of 3.6%, primarily related to new stores, and a reduction in selling margin of 2.8%, primarily related to increased discounts.
The retailer reported a net loss of $16.3 million for the year after a net income of $1.9 million for 2006.