Save Our Soles: Clarks struggles to compete during the high street crisis
January 6, 2020
2 min read
What's going on here?
Footwear retailer Clarks is the latest victim of the high street crisis.
What does this mean?
Clarks reported an £82.9m loss after tax last year and has called on consultants, McKinsey & Co. to chalk out its restructuring plan, mirroring a Karen Millen style store shutdown plan. The company is set to exit its worst performing locations as soon as possible. The main reasons for this seem to be rising overheads, unfavourable trading conditions as well as a shift to online retail.
Sales fell 4.6% in 2018-19, leading to losses being more than double that of the previous year.
What's the big picture effect?
Clarks is the latest store in a string of high street exits as a result of a failure to move to online shopping (for more, check out our article on Mothercare closing down here and Monsoon’s struggles here). This, coupled with unfavourable trading conditions in the US and the UK has meant that the family owned business is finding it difficult to keep its shutters open.
The high street continues to suffer because of a combination of high business rates, increasing overheads, reduced footfall and the uncertainty of Brexit.
The shoe retailer has 533 stores in the UK and over 11,000 employees who will all experience the effects of this planned shutdown.
The bigger picture here is the crisis that looms over the high street with over 2,800 stores forced to shut shop in the first half of 2019 itself. It is time for these high street giants to think beyond the traditional brick and mortar stores and move into the online space to keep up with the change in consumer behaviour. While it struggles to keep its doors open, online retailers like Boohoo have swept in on these brands and lured the online businesses of Karen Millen and Coast after they went into administration.
Until traditional stores either move online or come up with a new, innovative solution, it seems that Clarks’ struggles won’t be the last we see for high street stores.
Report written by Maya Sajeev
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