Shoe Zone has warned investors it will swing to an underlying loss of around £1 million for the full year, as sliding sales and cost pressures weigh on the retailer. The group saw its shares plunge by as much as 22% after reporting a 4.5% drop in revenues to £142.4 million for the 53 weeks to October 3.
The expected loss compares with profits of £2.4 million in the previous year. Shoe Zone cautioned that the autumn/winter season had so far been slower than expected, which knocked the final weeks of its financial year and was continuing into its first quarter.
Store estate shrinks
Sales were also weighed on by shop closures, with the chain's estate falling to 251 at the year-end, down from 269 in October 2025. The portfolio now consists of 211 larger format stores and 40 original high street stores.
Shoe Zone highlighted efforts to relocate and revamp its retail chain into newer and bigger formats, which it wants to complete by the end of 2027.
Consumer confidence under pressure
Chairman Charles Smith said: “This was a challenging year, particularly in the first half, as consumer confidence continued to be weak, and fell further following the Government’s November 2025 budget, with persistent inflation, higher interest rates remaining elevated and reduced levels of disposable income all contributing to a generally negative economic and consumer sentiment in the UK.
“Sales were good when there was a clear reason to buy, such as the warm summer and the Back-To-School season.
“However, overall discretionary spending remains subdued as consumers exercise greater caution in their expenditure.”
Cost pressures from Iran conflict
The company also told investors that the Iran war conflict had resulted in higher fuel and transportation costs and pushed up the price of containers used for shipping, which it warned could weigh on financial performance.
It said: “We continue to monitor the macro and geo-economic/political environment closely and await the outcome of the Government’s October 2026 Budget.
“We have recently seen an increase in container prices and a weakening of Sterling to Dollar exchange rate, as well as an increase in fuel prices, all of which could negatively impact trading.”
