Revenue is Growing, but You're Store is Broke

Revenue Is Growing.
So Why Does Your Shoe Store Feel Broke?

By Alan Miklofsky | Professional Shoe Dog

If your sales are up.

Traffic looks decent.

Your POS reports show growth.

And yet, there never seems to be enough cash when you actually need it.

If that sounds familiar, here’s the uncomfortable truth:

Growth does not fix cash problems.

Poor margin and cash discipline magnify them.

Many shoe store operators assume that more sales automatically mean more financial breathing room. In reality, growth without discipline often accelerates cash bleed—especially in a business with seasonal inventory, payroll pressure, and vendor terms that don’t care about optimism.

Shoe stores rarely fail because customers disappear overnight. They fail because cash quietly leaks out the back door while sales march proudly out the front.

Why Shoe Stores Grow Themselves Broke

Below are seven common cash drains in shoe stores—and what to do about each one.

1. Working Capital Bloat – Inventory Is Eating Your Cash

Over-assorted styles, slow sizes, and excess depth trap cash on shelves.

Fix it:

·         Tighten open-to-buy discipline

·         Reduce fringe sizes and colors

·         Buy depth only where sell-through proves it

·         Plan markdowns early, not emotionally

2. Gross Margin Erosion – Sales Are Up. Profit Is Not.

Margin erosion often comes from DTC discount pressure and excessive promotions.

Fix it:

·         Exit chronically unprofitable brands or styles

·         Push back on vendors who undermine MAP

·         Protect full-price selling windows

·         Measure margin by category, not just total

3. Overhead Creep

Payroll and expenses rise quietly until cash feels the squeeze.

Fix it:

·         Tie staffing levels to realistic productivity

·         Require managers to sell, not supervise

·         Audit SG&A annually with no sacred cows

4. Sales That Don’t Pay Back

Not all sales are created equal.

Fix it:

·         Train for solution selling and add-ons

·         Track average transaction value weekly

·         Incentivize profitable behavior, not just volume

5. Invisible Debt Pressure

Profit on paper does not equal cash in the bank.

Fix it:

·         Maintain a rolling 13-week cash flow forecast

·         Track actual cash debt service

·         Refinance high-interest debt when possible

6. Deferred Maintenance

Delaying upgrades creates future emergencies.

Fix it:

·         Build a 3-year capital plan

·         Prioritize investments that protect sales and labor efficiency

7. Unmanaged Sales Mix

More sales with lower tickets quietly drain cash.

Fix it:

·         Set minimum ticket expectations

·         Adjust incentives toward higher-value transactions

The Bottom Line

Most shoe stores don’t fail because sales disappear. They fail because cash discipline disappears first.

Which of these drains is quietly working against you right now?