Shoe Zone is shutting stores, blaming an increasing wage bill as a result of the chancellor’s October budget announcement.
The retailer, which has headquarters in Leicester, blamed “significant additional costs” resulting in some stores becoming “unviable”, although it had already begun closing some loss-making stores throughout the year.
It has not yet revealed how many outlets will be closing, nor the number of employees affected.
Shoe Zone currently has 297 outlets throughout the UK and around 2,250 employees.
In the year to September, 26 branches shut their doors for good and, in addition to closing non-profit making stores it is also revamping its remaining ones. The company is also growing its number of new bigger sites located in retail parks and similar locations.
Budget cost concerns
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The company admitted it faced “very challenging trading conditions”, citing unseasonable weather and weakening consumer confidence since the October budget.
Other retailers have also expressed concerns over the dire impact of the extra costs they face following the announcement, with some of the UK’s biggest outlets – including Amazon UK, Tesco, next and Asda – writing a letter to the chancellor detailing their worries.
Its shares dropped by 49% today as it warned of lower-than-expected profits because of the challenging trading conditions and additional pay bill. The business also cancelled its final dividend payout for shareholders in the year 2023-24.
The business said underlying pre-tax profits would be down by nearly half, from £10m previously expected to £5m for the year to September 2025.
This is the second profit warning the business has issued in a matter of months, with it most recently doing so in October.
Shoe Zone has been contacted for comment.
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