Clarks is set to reduce more than 150 roles as it reports a financial downturn.
- Operating loss for Clarks stood at £20.3m for the year ending December 2023.
- Turnover saw a slight increase of 1.4% to £994.5m despite the overall loss.
- Clarks faces challenges from weak demand and overstocks in the wholesale sector.
- Key leadership changes were made following the departure of several top executives.
Clarks, a renowned footwear company, is preparing to cut over 150 jobs globally after experiencing a significant financial setback. This decision follows a recently reported operating loss of £20.3 million for the fiscal year concluding on December 31, 2023. Compared to the previous year, when the company recorded a profit of £54.5 million, this figure underscores the challenges Clarks is currently facing.
Despite these losses, Clarks’ turnover increased slightly by 1.4%, reaching £994.5 million. However, losses before tax amounted to £39.8 million, sharply contrasting with a profit of £35.9 million the previous year. The financial downturn includes one-off costs totaling £52.8 million, with substantial impairment charges at £41.6 million, indicating severe financial strain.
Clarks attributed these financial difficulties to several factors, including weak demand in full-price channels, excessive inventory with wholesale partners, a promotional market environment, and inflationary pressures affecting product costs. The company expressed concerns about the ongoing uncertain business climate, particularly in Western markets. “A combination of the above factors has resulted in loss after tax performance short of target expectations and last year’s levels. The business and trading environment at the close of 2023 is one of ongoing uncertainty and relative pessimism, especially in the Western hemisphere,” a Clarks statement revealed.
The company’s net cash position also dwindled significantly to £20.4 million from £52.1 million in the previous year, further exacerbating its financial challenges. To navigate these turbulent times, Clarks has undertaken leadership restructuring, with the recent exit of its UK and Ireland managing director, Bob Neville, and chief product officer, Victoria Jones. This follows the earlier departure of CEO Jonathan Ram in April. In response, chairman Colin Li and other directors have formed an interim executive committee to steer the company through these changes.
Since 2021, Clarks has been under the majority shareholding of Hong Kong-based Viva Goods, led by Chinese businessman Li Ning, while the Clark family retains a minority stake. Despite the adverse situation, Clarks has chosen not to comment on the impending job cuts.
Clarks’ restructuring and job cuts reflect its ongoing challenges in a volatile market environment.
