Shoe Zone has closed its stores due to an increase in wages as a result the budget announcement made by the chancellor on October.
The retailer with its headquarters in Leicester blamed “significant added costs” for making some stores “unviable”. However, it had already started closing some loss-making shops throughout the year.
The number of affected employees and the number outlets that will close have not been revealed yet.
Shoe Zone has around 2,250 employees and 297 stores in the UK.
26 branches have closed their doors permanently in the past year. In addition, it has remodeled its remaining stores. The company also plans to increase the number of larger sites in retail parks, and other similar locations.
The company acknowledged it was facing “very challenging” trading conditions, citing unseasonable temperatures and a weakened consumer confidence following the October budget.
Some of the UK’s largest retailers, including Amazon UK and Tesco, have written a letter to the chancellor expressing their concerns.
The company’s shares fell by 49% after it announced that profits would be lower than expected due to the difficult trading conditions and increased pay bill. The company also cancelled the final dividend payment for shareholders in 2023-24.
The company said that the underlying profit before tax would drop by almost half from PS10m to PS5m, as previously anticipated.
The business issued its most recent profit warning in October.
Shoe Zone was contacted to get a comment.
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