Clarks will undergo an “evolution, rather than revolution”. At least that’s what the management of Lion Rock Capital, new owner of the historic English brand is saying. The Hong Kong-based PE fund is working on the plan to relaunch Clarks.
Some aspects are clear: “at least triple or quadruple the revenues in China, closing some licensing agreement (the one with Levi Strauss is still being negotiated), joint ventures, franchising and partnerships with influencers”. Other aspects, on the other hand, are still being defined, such as how many stores to shut down and employees to lay off.
Evolution, rather than revolution
“We’re in the final stages of wrapping all the UK store restructuring that needs to take place”, said Daniel Tseung, founder of Lion Rock. Clarks’ new CEO, Victor Herrero, told the Telegraph that he will fight for every one of the current 320 stores: “We must try to retain the highest possible number”. Kien Tan, senior retail advisor with PWC agrees: ““For shoes, there will always be some customers who prefer shops as part of their purchase journey, even if they either do the research or complete the transaction online. It’s a completely different customer.
Even Dr Martens has a strategy that is partly based on physical stores. Yet, we will need to wait to see what the impact of the decisions made by the new owners will be, on the 12.000 employees that the brand currently has.
China is the priority
Expansion in China is a key priority. The brand sells about 40 million pairs a year, with 1.4 billion pounds of revenue: 1/3 is sold in the UK, 1/3 in the USA and the rest is spread out around the globe.
While retail analyst Nick Bubb remains skeptic, with regards to Clarks’ possibilities (“There are lots of middle-class consumers there, but many Western brands have tried and failed to break into that market”), the new owners have an ace up their sleeves: Li Ning. The ex-gymnast and president of Lion Rock is one of the most well-known retailers in China. Tom Pitts, manager of the Asian fund, states that Clarks aims to “at least triple or quadruple the revenues” within the borders of the People’s Republic.