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Clarks blames challenging year for profit decline

By Prachi Singh

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Management |REPORT

Amid tough trading conditions, global footwear major Clarks declared that its turnover for the year to January 31, 2016 remained flat at 1.5 billion pounds (2.1 billion dollars), however pre-tax profits declined from 98.8 million pounds (139.8 million dollars) to 35 million pounds (49.5 million dollars). The company’s board continues to look for a chief executive and chief financial officer to boost brand’s global appeal.

According to Chairman Thomas O'Neill, the year was very challenging and it was one where our trading targets were not met. “After absorbing the negative effects of the unexpected supply interruption in Vietnam and encountering considerably tougher trading conditions in two of our key regions business weakened. It prompted intense promotional activity in our retail network particularly in the Autumn/Winter season that adversely affected our profitability,” he added.

Operating profit halves

Operating profits for the year decreased from 112.7 million pounds (159.4 million dollars) to 45.8 million pounds (64.8 million dollars). The group sales, however increased 2.6 percent to 1.53 billion pounds (2.16 billion pounds). Turnover in the UK and Ireland increased from 637.4 million pounds (901.9 million dollars) to 654.4 million pounds (924.9 million dollars). Clarks' revenues were driven by the UK and Republic of Ireland which accounted for 637.4 million pounds (900.9 million dollars), down from 644.6 million pounds (911 million dollars) from 2014.

Most of the decline in overall revenue was led by the Americas where turnover declined from 625.9 million pounds (884.6 million dollars) to 559.6 million pounds (932.2 million dollars). Turnover from European operations rose to 159.7 million pounds (225.7 million dollars) from 145.5 million pounds (205.6 million dollars) and to 135.6 million pounds (191.6 million dollars) from 125 million pounds (176.6 million dollars) in the Asia Pacific region.

picture:clarks blog

Clarks