Footwear retailer Clarks has blamed a poor performance in the UK for a steep fall in group profits in the first half to July 31.

The UK downturn has adversely affected overall financial performance

Clarks pre-tax profit slumped 21% to £35.7m in the six-month period as a result of difficult trading conditions in the UK, as well as higher product costs and a rise in promotional activity across the group.

Operating profits at Clarks International – which includes the UK and all markets other than North America – dropped 37.2% to £23m in the first half.

However, like-for-like sales in the UK were up 3.1%.

Chief executive Melissa Potter said in a statement: “The overall financial performance of the group has been dampened by the downturn in our UK fortunes in the period.”

She added that profits in its UK retail division had been “severely squeezed by a combination of high-product cost inflation and increased promotional activity to drive transaction volumes.”

She added that in the UK “consumers further reined in discretionary spending in response to public expenditure cuts, inflation in energy, food and many other household costs, rising taxation and uncertainty over job security”.

Profits were hit by an increase in marketing expenditure of £5.8m. Group turnover grew 8.8% to £627.9m which Potter attributed to strong sales in international markets.

Potter said Clarks will this year “come close to matching” last year’s group operating profit of £110.9m.