TAXING TIMES
Huge shoe chain with 297 shops to close ‘unviable’ branches due to Budget tax hit
Scroll down to find out why the retailer is closing stores
A HUGE shoe chain with 297 shops has announced it will close several of its stores following a Budget tax hit.
Shoe Zone confirmed the "unviable" branches will shutter in a trading update to investors this morning.
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The closures come after it experienced "challenging trading conditions" in the first two months of the financial year.
It said consumer confidence had weakened further following the October Budget when the Government announced it was hiking employer National Insurance Contributions (NICs) and with the National Living Wage set to be increased next year.
The retailer added: "These additional costs have resulted in the planned closure of a number of stores that have now become unviable.
"The combination of the above will have a significant impact on our full year figures."
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The shoe chain did not say exactly how many branches will close in the trading update this morning.
The Sun has approached the retailer to find out how many stores will shut and if job losses are expected as a result and we will update this story when we have heard back.
The chain currently employs around 2,250 staff across 297 shops.
In the update to investors this morning the company said it expects its profit before tax for the financial year ending September 2025 to be around £5million, down from previous expectations of £10million.
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The retailer also said it would not be paying a dividend to shareholders for the financial year ending this September.
A dividend is money paid to shareholders who hold stock in a company based on its success.
Shoe Zone has already been closing loss-making stores over the past year, revealing in October 53 had shut with 27 opening - a net loss of 26 - in the year to September 28.
Shoe Zone's update this morning comes after a number of chains issued warnings over the Government's tax raid on businesses.
In its October Budget, Chancellor Rachel Reeves confirmed employer National Insurance Contributions would be hiked from next year.
The secondary Class 1 NICs rate will go up from 13.8% to 15% from April.
The raise comes after the Government said it would not raise taxes for "working people" in its manifesto.
However, fears have been raised the hike in employer NICs will hit workers as businesses stop hiring new staff, don't offer pay rises or even let staff go or close stores to cut costs.
The latest figures from the Office for National Statistics (ONS) revealed the number of people in the UK on payrolls fell by 35,000 to 30.4million 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 shows the private sector is cutting jobs at the fastest rate for near four years in December.
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The Confederation of British Industry's own survey found that half of businesses had said they would have to cut jobs to afford the £25billion tax raid.
Meanwhile, the Governor of the Bank of England (BoE) Andrew Bailey told MPs last month the Budget risked job losses and interest rates staying higher for longer.
Retailers closing stores in 2024
RETAILERS have been hit by soaring inflation and a downturn in spending due to the cost of living crisis.
High energy costs and a move to shopping online are also taking their toll.
Some high street shops have closed due to businesses opening up in different locations such as larger retail parks.
Shops may also close due to a number of other reasons, such as rising rents.
We explain which retailers are closing in 2024:
- Argos - The brand announced plans to close 100 standalone UK branches 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 over 300 shops across the UK, with two stores closing this year due to leases not being renewed. It has plans to open more in 2024 too.
- Boots - The health and beauty chain announced that it would be closing 300 stores last July. Closures are ongoing and this will see the retailer's estate reduced from 2,200 to 1,900 shops.
- Clintons - Clintons mulled plans to close 38 shops in a bid to avoid insolvency late last year. We've listed the stores affected.
- Costa Coffee - The caffeine giant has around 2,000 sites nationwide, so chances are you'll have one near you. The chain has shut the doors to dozens of its sites recently. We've revealed which stores are due to close this year.
- Iceland - The supermarket has more than 900 stores but closed nearly two dozen sites in 2023, and more selected shops are due to shut.
- Lidl - The supermarket, which has 950 stores, is changing up shop locations, which has meant that some stores have to close. But the retailer is also looking to open 12 new supermarkets.
- M&S - M&S, which runs 405 stores across the country, has been closing a string of branches across the country in a blow for shoppers. It's not all bad news, though, because the chain also has big plans to open dozens of new shops.
- Trespass - The firm announced in July last year that it was closing six branches, but more are on the way.
- WHSmith - The retail giant, which runs over 1,100 stores, has shut eight stores since March 2023, but more are coming.
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