Bradford footwear retailer Stylo, the owner of the Hush Puppies and Saxone chains, today warned that a flood of cheap shoes onto the retail market would significantly affect their results for the current year.

The company blamed the surge of heavily discounted shoes on last year's closure of market leader the British Shoe Corporation which, it said, put pressure on its profit margins.

Shares in the Bradford-based group tumbled after it warned its final results would be very poor, blamed on a mixture of bad weather and general malaise in the shoe and leisure market.

Hush Puppies, the shoe favoured by former Chancellor Kenneth Clarke and rock stars Liam Gallagher and David Bowie, continued to produce disappointing sales, said the group.

The pig skinned lace-ups have failed to produce the desired profits Stylo had hoped when it bought the chain from the British Shoe Corporation in 1996.

The disruption of converting 38 Hush Puppies stores into the company's core brands, Barratts, Instep and Bacons, hampered profits as a period of rebranding and refitting took hold. However, it delivered a 16 per cent improvement in turnover.

In a trading statement to the Stock Exchange, the company said its dividend levels could also be affected.

The group's sports shoe business, Instep, also suffered in its buying and merchandising activities.

Stylo has appointed a new managing director and sales manager to help try and rectify the situation.

Despite the bad news, chairman Arnold Ziff remained upbeat about the company's future.

"Although this year's results are likely to be very poor and would be exacerbated by an Indian summer following the end of our summer sales which are now in progress, I am confident that the restructuring and rationalisation programme implemented by the Board will result in a more focused and robust group which will enable us to deliver our commitment of improving the profitability of our business and maximising shareholder value."

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.