Covid-19: Clarks plays down store closure reports

Footwear brand Clarks is facing a difficult midmarket squeeze after failing to adapt to changing conditions before being hit by the Covid-19 crisis, according to analysts.

The footwear brand has countered reports from Sky News that suggested it was closing stores because of losses caused by the Coronavirus outbreak. According to Clarks it is to close a small number of stores due to a regular store review process. The leases on each of the branches – of which there are fewer than 10 – was coming to an end, said the company.

“Clarks continually reviews all its stores to ensure that they are the right size and located in the right areas in order to provide the best possible service and offering to its customers. As part of this normal review, we have decided not to renew the leases on a small number of stores and as such, these will cease to trade and will not reopen following the coronavirus closures,” said a Clarks spokesperson.

But analysts said the brand is still facing difficulties.

“Clarks is in a typical midmarket squeeze: like M&S it is a heritage brand that has been too slow to adapt to a changing market – both in terms of product development (with the athleisure trend driving growth) and addressing the shift to online. Clarks had already brought in McKinsey to try to get it back on track, but with an excessive store estate, its core UK footwear market share plummeting and having fallen into the red, the management consultants had a huge job on their hands even before the virus hit,” said GlobalData UK research director Patrick O'Brien. He added that the brand shoulld have explored store closures earlier.

“The channel shift over the last decade has not come as a surprise. Progress has been at a snail’s pace – while it has shut some concessions it had the same number of full price stores in the UK at the end of FY2019 as it did at the end of FY2018. The truth is a lack of decisive action over the last five years has put another much loved British retailer in a weaker position than it should be to withstand the current crisis.”