Clarks has announced a major restructuring, as over 150 roles are now at risk due to recent financial losses.
- The job cuts will affect employees across global offices, mainly in Somerset, Massachusetts, Shanghai, Tokyo, Singapore, and Paris.
- Clarks reported a significant operating loss of £20.3 million for the year ending 31 December 2023, a stark contrast to the previous year’s profit.
- Amidst growing challenges, including weak demand and inflationary pressures, Clarks is navigating an uncertain economic environment.
- Leadership changes have occurred at Clarks, with important departures and the formation of an interim executive committee.
Clarks has initiated a significant restructuring process, with over 150 roles at risk due to recent financial downturns. This restructuring will impact employees across various global offices, including key locations such as Somerset in the UK, and its Americas base in Massachusetts, along with offices in Shanghai, Tokyo, Singapore, and Paris.
In the financial year ending 31 December 2023, Clarks reported an operating loss of £20.3 million. This represents a notable decline from the previous year’s profit of £54.5 million. The company’s turnover increased slightly by 1.4% to £994.5 million. However, loss before tax stood at £39.8 million, shifting from a profit of £35.9 million in the prior year.
The financial performance was affected by one-off costs amounting to £52.8 million, which included a store impairment charge of £41.6 million. The company attributed its underperformance to weak demand in full-price channels, overstocked wholesale partners, a promotional marketplace, and inflationary pressures on product costs.
Clarks acknowledged the loss after tax fell short of both target expectations and last year’s levels. The economic backdrop at the close of 2023 was characterised by ongoing uncertainty and optimism, particularly within the Western hemisphere, affecting overall business and trading conditions.
The company’s net cash position was significantly reduced, totalling £20.4 million, down from £52.1 million the previous year. In light of these challenges, changes in leadership have also taken place. Bob Neville and Victoria Jones have left their roles as UK and Ireland managing director and chief product officer respectively, following the earlier departure of CEO Jonathan Ram in April.
In response to these leadership vacancies, Clarks’ chairman Colin Li and other directors have established an interim executive committee to lead the company. Additionally, Hong Kong-based Viva Goods holds a majority stakeholder position, under the control of Chinese businessman Li Ning, with the Clark family retaining a minority stake.
Clarks confronts a challenging financial future with strategic restructuring and leadership adjustments amid ongoing market pressures.
