Clarks this week said it would shed hundreds of jobs, including 160 immediate redundancies, as it reshapes its business for the way that its customers now want to buy. It will now expand its digital and social channels as it looks to reach those customers in new ways.
The shoe retail brand expects to cut its global workforce by 900 jobs over the coming 18 months, a process that is starting with 160 redundancies, including 108 at its headquarters in Street, Somerset. Clarks hopes to mitigate job cuts through the creation of 200 new jobs, so that in total 700 will leave the payroll.
The move is part of Clarks’ ‘made to last’ strategy that began at the end of last year, when 170 employees left the business. Store numbers will continue to be under review as the business judges how customers now want to buy. At the same time, the company aims to expand its digital and social channels as it aims, in the words of Clarks chief executive Giorgio Presca, “to put our brand and consumers at the heart of everything we do”.
“There are exciting opportunities ahead of our business and we are having to make some difficult decisions to get there,” said Presca, who took on the role in February 2019 and has more than 20 years of experience in managing and developing global premium brands, including Geox, Diesel, Golden Goose, VF corps and Levi Strauss & Co.
He added: “With two centuries of change and adaptation behind us, Clarks has proved itself to be one of the most resilient brands in the world, with our theme ‘Then, now, always’.”
Clarks was founded in 1825. Presca was appointed as Clarks’ chief executive in February 2019 and has more than 20 years of experience in managing and developing global premium brands, including Geox, Diesel, Golden Goose, VF corps and Levi Strauss & Co. He points to Clarks’ Desert Boot (pictured), created 70 years ago, by Nathan Clark, as a "radical product that broke all the rules" and was an example of the simplicity, individuality and resilience of the Clarks brand.
He said: “To ignite our emotional connection with consumers, we have organised Clarks’ brand portfolio across three distinct business units that each represent a unique segment of the shoe market – Clarks Originals, Clarks, Collection and Cloudsteppers by Clarks.
“This is helping us move fast to get ahead of the changes in the ways that our consumers live their lives, so that we are there for them every step of the way.”
Clarks closed many of its shops temporarily in March as non-essential shops closed in the Covid-19 pandemic. Since then it has stated to reopen in China and some European markets. It is following guidance from governments and health authorities around when it might reopen in its other markets.
Commenting on the news, Andy Barr, co-founder of online price tracking website Alertr.co.uk said: “We keep hearing the phrase ‘these are unprecedented times’ and hearing of how companies are struggling in the current Covid-19 climate, and it seems that this is most true for those who have a presence on the high street – as Clarks do. There are going to be a lot of companies evaluating their current business models, and many will have to look at what the potential future of their business will look like as the long-term effects of the coronavirus pandemic could be more permanent than we initially thought.
“Job losses are always hard to read about, more so for those affected who will soon find themselves without a job, but in this case we hope that it is a temporary solution to secure the future of Clarks and will eventually lead to the creation of more jobs down the line.”
Patrick O’Brien, UK retail research director at GlobalData, said that Clarks’ had suffered from a wider mid-market squeeze and that it had gone from from footwear market leader in 2014 to the third biggest in 2019.
He said: “At the end of its FY2019 Clarks had 521 stores in the UK, including concessions, and while it began a portfolio review in 2017, it really should have started the process of eliminating stores much earlier, as the channel shift over the last decade has not come as a surprise. Progress has been at a snail’s pace – while it has shut some concessions it had the same number of full price stores in the UK at the end of FY2019 as it did at the end of FY2018.
“A lack of decisive action over the last five years has hindered Clarks but chief executive Giorgio Presca who joined in 2019 has demonstrated that he is keen to make significant changes, evident from the swathes of head office cuts announced.”