Retailer Shoe Zone has warned it is set to slump to an annual loss as it blamed the Iran war and recent budget woes in the UK for weakening shopper confidence.
The high street chain, which has 259 stores and more than 2,000 staff across the UK, said the Middle East conflict was also pushing up costs such as shipping and transport, which is set to impact its bottom line.
Shares in the group plunged by more than a fifth, down 22%, in morning trading on Wednesday as Shoe Zone said it expects to swing to an underlying pre-tax loss of between £1 million and £2 million for the year to October 3, against previous guidance for profits of £1 million.
Leicester-headquartered Shoe Zone said its first quarter had seen “challenging trading conditions, principally due to a continued weakening in consumer confidence, following on from the Government’s last two budget announcements, and the geo-political issues in the Middle East”.
It added: “These macroeconomic factors have increased customer caution, leading to lower footfall, less discretionary spend and additional costs such as container prices and transportation costs, with a resultant reduction in revenue and profit.”
Budget clothing chain Primark revealed on Tuesday that it had seen weaker trading in April as pressure from Middle East conflict weighed on consumer sentiment.
Shoe Zone has previously hit out at “highly adverse” Government policies amid deepening trading woes which have sent its shares tumbling to the lowest level in more than five years.
It said profits fell by more than two-thirds to £3.3 million in the year to last September and store sales dropped 10.3% as it ended the year with 28 fewer shops on a net basis.
The group said recently that Government policies had hurt consumer confidence and sent business costs surging.
Shoe Zone has 53 smaller format high street stores and 206 larger stores.
It sells around 13.3 million pairs of shoes a year at an average price of about £13.00.
