Retailer Shoe Zone has seen shares slump after revealing tumbling annual sales and profits.
The Leicester-based chain, which employs about 2,250 staff across 297 stores in the UK, posted a 38% plunge in pre-tax profits to £16.2 million for the year to September 28 after sales fell 2.7% to £161.3 million.
Shares dropped another 10% in morning trading on Tuesday after the results were revealed, which come after the group alerted over profits twice in as many months at the end of last year.
Shoe Zone put the profits drop down to higher costs for shipping, energy, wages and store refits.
The group’s sales were also impacted by store closures, with 26 sites having shut over the year on a net basis.
Chairman Charles Smith said: “The year-on-year reduction is primarily due to the challenging second half trading environment, as a result of unseasonal weather conditions, particularly in peak summer, higher container prices, higher energy costs, higher depreciation charges due to increased capital expenditure, and higher wage costs due to the National Living Wage increase.
“We continue to actively reduce our cost base in all areas of the business and have reduced our rent bill through proactive discussions with landlords with further savings on renewals.”
Shoe Zone claimed last month that the recent Budget measures had accelerated some planned store closures.
The group said the Chancellor’s move to increase employers’ national insurance contributions and hike the minimum wage had led to “significant additional costs”.
“These additional costs have resulted in the planned closure of a number of stores that have now become unviable,” it said at the time.
As well as shutting less profitable shops, it is also revamping remaining high street stores and increasing its number of new larger sites based in locations such as retail parks.
In its full-year results, it said it expects to relocate or open a further 17 stores and continue to close a number of older stores, while refitting at least nine stores to the new format.
“Our target is to have approximately 280 stores in total, by the end of 2026-2027, with all original stores having been refitted, relocated or closed,” the group said.
Shoe Zone’s shares have plunged by more than 60% in the past year, hitting three-year lows at the start of 2025.
