British footwear brand Clarks posted a 2.4% loss for its pre-tax profits for the year to January 31 due to a combination of high cost pressures and a rise in promotional activity. Pre-tax profit was down from £1.08bn to £1.06bn, while group turnover was up 9.1% to £1.4bn. Operating profit dropped 16.4% due to a difficult domestic market.
Clarks chief executive Melissa Potter said: “While the UK has remained extremely challenging throughout and European markets became ever more clearly influenced by the wider concerns over the sovereign debt crisis as the year progressed, North America has emerged with increasing confidence from the recession and our fledgling operations in Asia, India and the Middle East all prospered in a climate of business growth.”
In North America Clarks achieved a growth in turnover of over 9.1% to £524m as the company sold 20 million pairs of shoes in the market for the first time.
In the UK, Clarks’ best performing area was its multi-channel business, with its combined home delivery and collect-from-store business growing to £45.9m in turnover by the end of the full-year period. Clarks said it sold 1.5 million pairs through this channel, with sales up 42.7%.
Clarks’ wholesale and franchise business experienced a year of record growth, with net turnover up 26.4% to £263m.
Potter added that while conditions in the UK remained challenging Clarks will continue its current programme of exiting unprofitable store locations. "This will be a gradual and long-term process which will still leave us with a substantial investment in retail distribution in our home market,” she said.
Clarks will focus on its kids footwear and driving its multi-channel operations in the coming months.
The company was founded in Somerset in 1825 by brothers Cyrus and James Clark and currently sells to over 35 countries worldwide.
Image: Clarks footwear