Cut-price footwear retailer Shoe Pavilion Inc has announced a third quarter net loss of $1.2 million, compared to a $104,000 loss suffered in the same period last year.

Despite the downturn, the Californian company's net sales increased 13.9 per cent for the quarter year-on-year to $21.6m, while comparable store net sales were up 4.7 per cent based on the same period in 2002.

During the third quarter, the company closed three stores, but has opened two new outlets in the fourth quarter so far, bringing its total operations to 86 stores.

Shoe Pavilion operates stores throughout California, Washington and Oregen, selling such brands as Dr Marten, Fila, Rockport, Timberland, Vans and Via Spiga at discounts of up to 70 per cent off.