Shoe Zone has been forced to close several stores due to the increased wages and taxes announced in the Budget.
The discount shoe retailer, which employs approximately 2,250 staff across 297 UK stores, cited the Chancellor’s decision to hike employers’ National Insurance Contributions (NICs) and raise the minimum wage as the cause of “significant additional costs”.
The high street chain stated: “These additional costs have resulted in the planned closure of a number of stores that have now become unviable. The combination of the above will have a significant impact on our full year figures.”
As reported by The Mirror, the company did not officially confirm how many stores it had shut down or the number of workers affected by the closure. It comes as the firm has been strategically closing loss-making stores this year.
A report in October showed a net closure of 26 stores. Overall, 53 sites had closed, with fewer than 27 new openings in the year up to September 2024.
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In a recent update to investors, the company forecasted its pre-tax profit for the financial year ending September 2025 to be around £5 million, a steep decline from the previously anticipated £10 million. This marks the second profit warning in recent months, following a downgrade in October for the year to September 2024, which was attributed to poor summer weather affecting sales.
Retailer Shoe Zone has announced it won’t be issuing a dividend to shareholders for the financial year concluding this September, citing “very challenging trading conditions” post-September with reduced consumer spending amid uncommon weather.
Additionally, they noted a dip in consumer confidence following the October budget.
Its shares saw a dramatic fall of up to 49 percent on Wednesday morning as it warned that its yearly profits would come in below expectations due to the difficult market environment and increased wage costs. The firm reported a 2.7 percent decline in annual sales and projects profits for the 2023-24 period to reach “not less than” £9.6 million, a decrease from £16.2 million the previous year.
The Mirror is seeking further comments from Shoe Zone.
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