LONDON — Storied footwear label Clarks has laid out a strategy to revamp the company as it prepares to enter its third century in business.
The strategy, Made to Last, involves shifting the company’s focus toward digital and social channels, something that requires a complete restructuring of its operations and significant reductions in the workforce.
On Thursday, the company revealed 160 redundancies across its global offices, including 108 in its headquarters in Somerset, England. Up to 700 more positions will need to be eliminated in the next 18 months, the company said.
“There are exciting opportunities ahead for our business, and we are having to make some difficult decisions to get there,” said Giorgio Presca, the brand’s chief executive officer, who joined last February after serving as a temporary, external consultant for Pucci and a ceo at Golden Goose Deluxe Brand.
Presca began spearheading the Made to Last strategy and reviewing its retail network at the end of last year, at which point 170 people left the business.
In addition to adopting a new digital focus aimed at enabling better customer interaction, Presca has been shining a light on other key business areas, including sustainability, innovation and design.
He said his aim is to spotlight the label’s heritage as it prepares to enter its third century in business and focus on some of the brand’s most timeless styles, like the Desert Boot.
“The Desert Boot was a radical product that broke all the rules. It was launched as a utility shoe in 1950, but has since become a much-copied, globally-adopted icon of casual footwear,” he said.
The brand’s collections will now be divided into three categories — Clarks Originals, Clarks Collection and Cloudsteppers by Clarks — each addressing different market segments.
“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,” Presca added.
The company added that, after closing a large number of stores temporarily amid the COVID-19 pandemic, it is now “reviewing funding options with selected advisers” to enable it to forge ahead with the execution of its new strategy.
The stores in China and a number of markets in Europe have now began to reopen, while doors in the U.K. and the U.S. will begin opening in line with local government regulations.
In the fiscal year ended Feb. 2, 2019, the company saw revenues drop 4.6 percent to 1.47 billion pounds while after-tax losses widening to 82.9 million pounds, according to Companies House, the official register of U.K. businesses. Management said the losses were due to charges related to the U.S. and U.K. retail businesses.
Clarks said that in fiscal 2018-19 it suffered from a decline in footfall at its retail stores in the U.S. and the U.K., and the U.S. retail business in particular was a “drag” on profitability in the year.