Clarks is among the largest footwear companies in the world. The footwear specialist trades through some 1,145 stores, of which 320 or so are based in the UK and Ireland. It is also active in wholesaling in its regions.

Clarks has operations in around 15 countries to manage the production of 50 million pairs of shoes a year. Manufacturing takes places predominantly in China, Vietnam, Cambodia and India. 

The past few years have been a difficult trading period for Clarks, hitting sales and profits.

Group turnover has fluctuated, coming in at a reduced £775.0m in the 2020 financial year as shops were forced to close for lockdown periods during the pandemic. The retailer was also back in the red with pre-tax losses coming in at £172.2m.  

Sales in the UK and Ireland division tumbled 42.7% to £270.6m in FY2020.

Management has conceded that the business has become increasingly less profitable over the last five or so years and is under significant stress due to a range of factors including legacy issues from previous investment decisions, internal challenges and external headwinds.

The situation has been exacerbated by the pandemic and in late 2020, a CVA proposal was approved by creditors, allowing the retailer to move the majority of its stores to turnover-based rents. The approval has, in turn, allowed Hong Kong-based private equity firm LionRock Capital to complete its £100m acquisition of a majority stake in the retailer.  

Retail Week also reported in late 2020 that Clarks had told almost 4,000 of its UK store staff that their roles were at risk of redundancy as part of radical plans to revive the business.

Innovation rating: 2

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