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Shoe Zone has lowered its full year profit forecast to an adjusted loss of between £1m and £2m after previously expecting to break even with a £1m profit, citing the impact of geopolitical issues in the Middle East for the downgrade.
According to the high street retailer, the conflict has led to higher container and transportation costs, reversing a period of relative stability. Management also pointed to a further weakening in consumer confidence and lower discretionary spend following the last two government budget announcements.
The profit downgrade comes as Shoe Zone has reported an adjusted loss before tax of £5.3m for the 26-week period to 28 March, which spells an increase from the £2.6m loss reported in the first half of 2025.
Revenues for the period fell 12% to £62.9m, down from £71.5m a year earlier, following a 14.1% drop in store revenues to £45.8m and a 6% fall in digital sales.
In light of its performance, the company closed 14 stores during the period, ending the half with 259 sites.
Despite the losses, product margins increased to 61.7% due to earlier favourable exchange rates. The retailer is also reducing the size of its distribution centre by exiting three of its six leases to reflect the smaller store estate.
Charles Smith, chairman of Shoe Zone, said: “Trade continues to be negatively impacted by a further weakening in consumer confidence, following the government’s last two budget announcements, as well as the geo-political issues in the Middle East.
“The Middle East issues have also resulted in a higher cost of containers and general transportation costs.”
