Profit warning after sales drop for Leicester company Shoe Zone

Shoe Zone sold fewer shoes than expected between April and June and has issued a profit warning, blaming bad weather and high shipping costs, it said in a trading update. The high street chain, founded in Leicester in 1917, said it expects to make about £10 million this year.

The original profit forecast for the year was £15.2 million. That was revised down to £13.8 million at its interim results in June and has now been revised down again.

Shipping costs have risen due to attacks on ships in the Suez Canal, causing international shipping bringing products to Europe from the east to go the long way around by sea.

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Meanwhile, the company has “experienced weaker than expected spring summer sales from April to June, due to unseasonal weather conditions”, it said.

On top of that, the increase in the National Living Wage to £11.44 was more than analysts had expected, adding at least £400,000 to projected staffing costs between April and October.

Shoe Zone also said earlier this year that it had reduced the number of its stores by 27, leaving it with 309 stores as of May. That, combined with the cost-of-living crisis in the UK has hit footfall and sales.

It comes after the Office for National Statistics said a cold and wet start to the summer risked hampering all UK businesses reliant on heavy footfall. April alone brought 55 per cent more rainfall than normal, which contributed to overall retail sales across all shops in the UK falling two per cent for the month, the statistics body said.