A MAJOR footwear chain with 297 stores has announced it will close several of its stores following the fall in the Budget tax.
Shoe Zone confirmed that “unviable” branches will close in a trading update to investors this morning.
1
Shoe Zone has confirmed it will close some of its “unviable” branchesCredit: PA
The closure comes after it experienced “challenging trading conditions” in the first two months of the financial year.
It said consumer confidence weakened further after the October Budget when the government announced it was increasing employers’ National Insurance (NIC) contributions and that the National Living Wage would be increased next year.
The retailer added: “These additional costs have resulted in the planned closure of a number of stores which have now become unsustainable.”
The footwear chain did not say exactly how many outlets it would close in this morning’s trading update.
The Sun has contacted the retailer to find out how many stores will close and whether any job losses are expected as a result, and we will update this story when we hear back.
The chain currently employs around 2,250 employees in 297 stores.
In an investor update this morning, the company said it expects its pre-tax profit for the financial year ending September 2025 to be around £5m, down from a previous expectation of £10m.
The retailer also said it would not pay a dividend to shareholders for the financial year ending this September.
A dividend is money paid to shareholders who own shares in a company based on its success.
The shoe zone has already closed loss-making stores over the past year, revealing in October that 53 stores had closed with 27 open – a net loss of 26 – in the year to 28 September.
This morning’s Shoe Zone news comes after a number of chains issued warnings due to the government’s tax crackdown on businesses.
In the October Budget, Chancellor Rachel Reeves confirmed that employers’ National Insurance contributions will increase from next year.
The rate of Class 1 secondary NICs will rise from 13.8% to 15% from April.
The increase comes after the Government said in its manifesto that it would not increase taxes for “working people”.
However, there have been fears that the rise in NICs for employers will hit workers hard as businesses stop taking on new staff, do not offer pay rises or even make staff redundant or close shops to cut costs.
The latest figures from the Office for National Statistics (ONS) revealed that the number of people on the payroll in the UK fell by 35,000 to 30.4 million between October and November.
Meanwhile, the number of job vacancies fell by 31,000 to 818,000.
Separately, the S&P Global Flash UK Purchasing Managers’ Index earlier this week showed the private sector shedding jobs in December at the fastest rate in nearly four years.
The Confederation of British Industry’s own survey found that half of businesses said they would have to cut jobs to afford the £25bn tax raid.
Meanwhile, Bank of England (BoE) governor Andrew Bailey told MPs last month that the budget risks job losses and interest rates staying higher for longer.
Retailers are closing stores in 2024
RETAILERS have been hit by high inflation and a drop in spending due to the cost of living crisis.
High energy costs and the shift to online shopping are also taking their toll.
Some high street shops have closed due to businesses opening in different locations, such as larger retail parks.
Stores can also close for a number of other reasons, such as rent increases.
We explain which retailers are closing in 2024:
- Argos – The brand announced plans to close 100 stand-alone branches in the UK last year as it looks to move away from the high street and focus on expanding its presence in supermarkets.
- B&Q – The chain has more than 300 stores across the UK, with two stores closing this year as leases have not been renewed. It plans to open in 2024.
- Boots – The health and beauty chain announced it would close 300 stores last July. The closures are ongoing and will reduce the retail holdings from 2,200 to 1,900 stores.
- The Clintons – The Clintons planned to close 38 stores in an attempt to avoid bankruptcy late last year. We have listed the affected stores.
- Costa Coffee – The caffeine giant has around 2,000 locations across the country, so chances are you’ll have one near you. The chain recently closed the doors to dozens of its locations. We found out which stores are closing this year.
- Iceland – The supermarket has more than 900 stores, but has closed almost two dozen locations in 2023, and more selected stores are due to close.
- Lidl – The supermarket with 950 stores is changing the location of its sales points, which is why some stores had to be closed. But the retailer also plans to open 12 new supermarkets.
- M&S – M&S, which has 405 stores nationwide, is closing a number of branches across the country which has hit customers hard. But it’s not all bad news because the chain also has big plans to open dozens of new stores.
- Trespass – The company announced last July that it was closing six branches, but more are on the way.
- WHSmith – The retail giant, which operates over 1,100 stores, has closed eight stores since March 2023, but more are to come.
Do you have a money problem that needs to be solved? Get in touch by emailing [email protected].
Additionally, you can join our Sun Money Chat & Tips group on Facebook to share your tips and stories
Categories: Optical Illusion
Source: HIS Education