Major UK chain pins blame on Labour's Budget as it announces wave of store closures
18 December 2024, 09:51
High-street retailer Shoe Zone is set to axe a slew of its 297 stores after they became commercially “unviable.”
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The shoe store, which employs 2,250 across nearly 300 locations in the UK, pointed to the Chancellor’s decision to increase employers' national insurance contributions and raise the minimum wage as key reasons for the closures.
"These additional costs have resulted in the planned closure of a number of stores that have now become unviable," it said.
It did not confirm how many stores had shut or the number of workers affected.
However, the brand did say it had been in the process of closing its unprofitable stores over the last year, with 26 closed in October alone.
Read more: UK inflation rate rises for second month in a row in latest Labour budget blow
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.
Shoe Zone shares fell by a massive 49% following the announcement, as executives warned profits will be especially low for 2023-24 financial 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.
