Clarks has unveiled a pre-tax profits rise of 5.5% to £119.8m for the year to January 2014, driven by strong back-to-school sales in the UK.
The footwear retailer posted group operating profits up 5% to £128.4m, on a revenues rise of 5.5% to £1.54bn, according to its full year accounts filed at Companies House. It said strong back-to-school sales and a more premium full-price adult offer had helped boost revenue. Its recent womens shoe collaboration with designer Orla Kiely for Spring/Summer 2014 had also “surpassed expectations.”
Online sales increased 17.4% to £64.3m for the year and now represent 10.4% of the total UK and Republic of Ireland business. Clarks said a key area of investment over the next two years will be a new online global platform, to help drive growth in its ecommerce business. Clarks chief executive Melissa Potter said: “Our ultimate ambition is to provide a seamless, integrated experience of the Clark’s brand to consumers wherever they are in the world and through whichever channel they choose to access the brand.”
The retailer’s biggest market by sales is the UK and ROI, followed closely by the US. Clarks said despite a good performance in the UK, the most severe challenges to trading came from the US, as a result of excess inventory and increased promotional activity in the autumn.
Last August, it acquired a distributor business in Turkey, a market it said has a high potential for long-term growth. It also purchased 34 full-price stores and two franchise stores in Southern China. It said similar investments are likely to be made in “certain European markets over time.”
For the 2014 outlook, Potter said: “In the UK and Republic of Ireland, whilst at the macro level there might be growing positive signs of recovery, for the average hard-pressed consumer the real sense of a feel-good factor which might influence discretionary spending intent remains elusive.”