Shoe Zone faces losses of greater than £1m and blames tax raid and Iran warfare for client ‘warning’

Shoe Zone is forecasting annual losses of up to £2million, blaming the Chancellor’s tax raid and ongoing Iran war for ‘challenging’ conditions as customers tighten their belts. 

The retailer said ‘continued weakening’ in consumer confidence caused by the successive Budgets and the Iran war had caused ‘challenging trading conditions’ in the first quarter.

Shoe Zone, which warned on profits as recently as January, is now forecasting losses of between £1million and £2million, having previously forecasted adjusted profit before tax of £1million.

Lower footfall and higher transportation and container prices, caused by supply disruptions in the Gulf, had reduced revenue and profit in the first three months of the year.

Shoe Zone has blamed the Chancellor’s tax raid and the Iran war for ‘challenging’ conditions

Trading in the second half is expected to be affected, too.

Shares sank 12.6 per cent to 45p and are down 50 per cent over the past year.

Shoe Zone, which operates across 259 stores and has 2,050 employees, has previously warned of the impact of Rachel Reeves’ Budget changes.

In January, the Aim-listed firm blamed ‘highly adverse’ Government policies for a drop in profits.

At the time, it 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.’

It also pointed to the increase in employer National Insurance contributions, which increased from 13.8 per cent to 15 per cent in April 2025. 

The shoemaker delivered pretax profit of just £3.3million for the year ended 27 September, down from £10.1million in the previous year. Full-year profits had been forecast at £5million.