A long-time high street staple have released new plans in their latest financial update to downsize their business and shut several stores for good, with jobs put on the line
A huge chain of stores and long-time high street staple have announced they will be shutting the doors of many of their shops.
Shoe Zone are officially downsizing their business and closing chains due to financial issues, leaving many of their shops “unviable.” They currently employ about 2,250 staff across 297 stores in the country – but now blame Rachel Reeves’ new schemes as the reason they can no longer generate enough money. The Chancellor of the Exchequer announced an increase employers’ national insurance contributions and an increase the minimum wage in her most recent budget review.
Now, Shoe Zone said they’re feeling the pinch and would not be able to cope with the increased spending. The news was announced in a financial update from the business this morning.
“These additional costs have resulted in the planned closure of a number of stores that have now become unviable,” they said.
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It did not say how many stores had shut or the number of workers affected. However, the group has already been closing loss-making stores over the past year, revealing in October that 26 sites had been shut on a net basis – 53 closed, less 27 opened – in the year to September 28.
Shoe Zone said it had also seen “very challenging trading conditions” since the end of September as shoppers have pulled back spending amid unseasonal weather, adding that consumer confidence had weakened further since the Budget in October.
Shares plunged by as much as 49% on Wednesday morning as it cautioned that due to the tough trading and extra wage bill, annual profits would be lower than expected, while it also cancelled its final shareholder dividend payout for 2023-24.
It slashed guidance by up to half, warning that underlying pre-tax profits were now set to be not less than £5 million, down from £10 million previously expected for the year to September 27 next year.
The profit warning marks the second in as many months after it also lowered guidance in October for the year to September 28 2024, blaming poor summer weather for lower sales.
Shoe Zone said annual sales fell 2.7%, which it expected will leave 2023-24 profits at “not less than” £9.6 million against the £16.2 million reported the previous year.
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