Shares in Shoe Zone have plummeted to their lowest value for more than three years after the company warning the changes announced in the Autumn Budget has forced it to close a number of stores.
The Leicester-headquartered retailer issued a trading update to the London Stock Exchange in which it revealed the impacted that “significant additional costs” are having.
Shoe Zone said the increases in National Insurance and the National Living Wage have made the stores selected for closure “unviable”.
Following the update, shares in the company slumped by 44 per cent to 77.5p, their lowest since October 2021.
Shoe Zone’s share price started 2024 at 231.8p and rose to a high of 278.2p in March but have been on a downward trajectory since.
In its trading update, the company said: “Shoe Zone announces that for the first two months of its financial year and the first half of December, it has experienced very challenging trading conditions, principally a weakening of consumer confidence and unseasonal weather, both of which have decreased revenue and profit.
“Consumer confidence has weakened further following the government’s budget in October 2024, and as a result of this budget, the company will also incur significant additional costs due to the increases in National Insurance and the National Living Wage.
“These additional costs have resulted in the planned closure of a number of stores that have now become unviable.
“The combination of the above will have a significant impact on our full year figures.”
In March, the company warned that it was trading below expectations due to higher-than-expected costs related to disruption in the Red Sea and slow trading over the autumn season.
Show Zone said that it now expects it adjusted pre-tax profit for the year to 27 September, 2025, to not be less than £5m, down from the previous expectation of £10m.
The company added that it is scrapping its final dividend for the year to 28 September, 2024.
The business is next expected to update the markets with its full-year results on 21 January, 2025.
Shoe Zone operates from a portfolio of 297 stores and has approximately 2,250 employees across the UK.