Shoezone bemoans National Living Wage pressures as earnings slide

Shoezone posted lower profits on Tuesday, blaming declining consumer confidence and ‘highly adverse’ Government policies. 

The shoemaker delivered pretax profit of just £3.3million for the year ended 27 September, down from £10.1million a year ago. Earnings per share slipped to 4.08 pence per share, from 16.04p previously.

Full-year profits had previously been forecast at £5million.

The London-listed group, which sells shoes from town centre and retail park stores, as well as online, warned of lower profits back in August, saying weakening consumer confidence had suppressed demand for its products.

Revenue fell 7.6 per cent to £149.1million for the period, largely off the back of a £13million fall in store revenue.

Shoezone closed 39 stores and opened 11 last year as profits slipped

Digital revenue, however, increased by £800,000 over the year as a result of improved sales on Amazon and on the firm’s website due to its free next day delivery. 

Shares in Shoezone plummeted 14 per cent on Tuesday morning. 

Conditions have ‘remained challenging’ in the first quarter of the new financial year, with revenue down on forecasts reflecting lower footfall and the ‘highly adverse Government policies.

Shoezone said profits were hit by increased National Living Wage and National Insurance costs, as well as a reduction in consumer confidence.

The National Living Wage was increased to £12.21 per hour from April last year. In April 2026, the wage will again increase to £12.71 per hour.

Meanwhile, employers saw National Insurance contributions increased to 15 per cent in April last year, as the threshold was also reduced to £5,000 from £9,100.

The firm said: ‘The Government’s November 2025 budget included an additional increase in the National Living Wage, raising our cost base further, with broader measures not materially improving consumer sentiment.’

Pretax profit for the current financial year, ending 3 October, is expected to be just £1.0million.

The retailer said it is actively reducing its costs across the business, while it has also slashed its dividend from 2.5 pence per share last year to nothing for the financial year just ended.

During the year, the number of stores was also reduced to 269, compared with 297 at the end of its 2024 financial year, with 28 net closures.