Shoe Zone, the beleaguered UK footwear retailer, has pinned the blame for a recent wave of retailer closures on price pressures stemming from October’s price range measures.
The Leicester-headquartered chain, which at present employs round 2,250 workers throughout 297 shops, stated new monetary burdens—particularly increased nationwide insurance coverage contributions and an elevated minimal wage—had pushed some retailers past the purpose of viability.
In a press release underscoring “very challenging trading conditions”, the corporate highlighted strained shopper confidence following the Chancellor’s newest price range, weaker-than-expected spending by buyers, and poor climate affecting footfall. Collectively, these elements pressured Shoe Zone to downgrade its revenue expectations for the 12 months to twenty seventh September 2025 to “not less than £5 million”—roughly half its earlier goal of £10 million.
“This year’s budget, announced by Rachel Reeves in October 2024, has intensified cost pressures and impacted consumer sentiment. As a result, certain stores can no longer be maintained,” Shoe Zone stated. The retailer confirmed it might not pay a last dividend for 2024.
Traders reacted sharply, sending shares down by 38.5 per cent to 85p. This additional decline caps a difficult 12 months, with the inventory having fallen by two thirds over the previous twelve months.
Shoe Zone, based in 1980, is well-known for its budget-friendly footwear—a mean value level of about £13.30 per pair—and operates from a mix of excessive avenue, retail park, and on-line websites. Though the corporate has been regularly closing loss-making shops to streamline its portfolio (26 web closures within the final monetary 12 months), administration had been hoping to stabilise or enhance monetary efficiency by means of incremental measures reminiscent of retailer refurbishments and larger-format retailers.
Nevertheless, the shock escalation in wage and tax prices seems to have accelerated the closure programme. Whereas no particular variety of additional closures was disclosed, the enterprise is clearly adopting a extra defensive posture within the face of financial headwinds.
Analysts have been divided over the chain’s justification for pinning closures on the price range. Some questioned the logic, noting that sneakers are usually thought-about non-discretionary purchases. But, others pointed to Shoe Zone’s historical past of prudent price administration and retailer transformation efforts, suggesting the retailer is just taking a disciplined method to retailer economics, refusing to subsidise loss-making branches in such unsure occasions.
Zeus Capital, for one, acknowledged the group’s resilience, citing robust underlying fundamentals: zero monetary debt and a monitor file of restoring dividends as soon as buying and selling situations enable. Whereas traders could discover little consolation in near-term turbulence, Shoe Zone’s swift and decisive response to shifting financial pressures could in the end serve its longer-term pursuits.
