British shoe giant Clarks — or more specifically the company known as C&J Clark International Limited — has filed its accounts for the 48 weeks to the end of last year and they showed both turnover and net profit declining
The company is a subsidiary of another subsidiary of ultimate parent C&J Clark (No 1) Limited and its reporting period is shorter than usual to align with that parent’s financial year, which does, at least partly, explain the reduced turnover.
Its turnover figure was down 2% at £502.8 million, while operating profit rose 53% to £37.1 million but net profit was down 28% at £22.6 million.
The company said that while the impact of the pandemic largely lifted in the period, the surge in post-pandemic demand couldn’t be met due to global supply chain issues in the first half of the year. This resulted in late delivery of product, intermittent quality issues and reduced availability of stock. Of course, it also led to lower levels of conversion, both in-store and online.
Clarks added that while ongoing supply chain issues reduced the amount of SS22 stock available in its UK and Republic of Ireland, shops, and conversion was below plan, this was offset by pricing initiatives as it increased average selling prices.
Meanwhile, direct-to-consumer trading softened from October as the UK cost-of-living crisis and high inflation made consumers more “price sensitive”. And despite the company having focused on higher prices earlier in the year, in the second half, it increased promotional activity to boost sales volumes. Yet this didn’t seem to have a negative effect and it said that by the end of December, both average selling prices and gross margin were higher than those achieved in the previous 12-month financial period that had ended in late January 2022.
As for the decline in profits, the company said overheads increased year-on-year, as it no longer benefited from one-off pandemic-linked government support such as business rates grants and furlough credits.
Looking behind the headline figures though, it seems that the business is headed in the right direction and has bounced back under new ownership from what was an existential crisis just a few years ago.
That can also be seen in the intense activity we’ve been reporting from Clarks post-period-end this year, with 2023 being in many ways a transformational year for the brand. It has gone from being that cosy, comfort-focused label we’re all used to and has become something much cooler.
We’ve had key product launches, major campaigns resonating with younger consumers, metaverse activations, and a raft of creative initiatives involving cultural names like Set Free Richardson, Nile Rodgers, Cat Burns, Aleali May and more.
Copyright © 2023 FashionNetwork.com All rights reserved.