Clarks are going to reduce the number of their stores. They will be compelled to do it after a negative financial year (2018/2019) and because of market high instability, as announced by the company’s top managers. More specifically, sales have been decreasing by 4.6% and operating profits dropped by 36%. Financial losses, after tax, amount to 82.9 million pounds.
Twenty million pairs
Giorgio Presca, Clarks’ chief executive officer, will have to get through a rather demanding task. He is supposed to reverse the company’s business trend, following a remarkably difficult year: indeed, the Italian manager is going to face a very complicated situation. In fact, revenues coming from sales dropped from 1.53 down to 1.46 million pounds. The company sold 20 million pairs of shoes, that is, 2 million pairs less compared to last year. Most of all, financial losses, after tax, have more than doubled. In fact, in the previous balance sheet they amounted to 31.3 million pounds. At the end of the last financial statements, they nearly reached 83 million pounds.
Too much uncertainty
Economic instability in two key markets, namely the United Kingdom and the United States, has been deeply affecting Clarks. “Our group has been playing, for a while, in a scenario that keeps proving extremely unpredictable”, remarked Thomas O’Neill, president of the brand. “The United Kingdom and the European Union have still to reach a deal on Brexit. Furthermore, commercial relations between the United States and China are still unsettled”. Therefore, “such a complicated business context has negatively affected the brand’s sales”.
To begin with, 18 stores shut down
Clarks have already shut down 18 stores (which were at a loss) across Great Britain. As reported by Thisismoney, the brand is planning some additional closures. Chief Financial Officer Paul Kenyon pointed out: “We are going to shut down, in the next five years, a remarkable number of stores”. Clarks are currently running 553 stores, in England and Ireland, plus around 1,000 more in the rest of the world.