Clarks lost its footing way before COVID-19 as it lacks adaptability

Following the news that Clarks is reportedly preparing to launch a CVA:

Pippa Stephens, Retail Analyst at GlobalData, a leading data and analytics company, offers her view on the situation:

Clarks’ reported proposal to shutter around 50 of its stores as part of a CVA is long overdue, as its lack of decisive action in recent years has put it in a far weaker position than it should be to withstand the current crisis. The retailer had 521 stores in the UK (including concessions) at the end of FY2019, and should have started the process of eliminating stores much earlier, as consumers have increasingly been shifting to purchasing online in recent years. With COVID-19 only accelerating this trend, the closure of just 50 stores is not significant enough to fully adapt, and the shuttering of more locations will likely be necessary so that it can prioritise its investments into its digital channel.” 

Clarks’ share of the UK footwear market is forecast to have fallen by 2.3ppts over the past five years, to 5.7% in 2020, as it has struggled to provide a compelling product offer, thus losing relevance among many of its core consumers. Though the athleisure trend had already been driving trainer purchases prior to the pandemic, COVID-19 has boosted appetite even further, due to greater importance being placed on fitness and being outdoors. This has caused sports specialists like JD Sports and Sports Direct to gain greater top of mind appeal, so Clarks must strive to increase its mix of comfortable and casual styles to help it win back market share and become more resilient to changing fashion trends.”

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