Clarks needs a sharper digital focus and tighter hand on its costs from new chief executive Mike Shearwood, observers said this week.
The former chief executive of Karen Millen was drafted into the footwear firm at the end of last month, ending a year-long search for a replacement for Melissa Potter, who left suddenly in September 2015.
“Stopping the bleed” will be a priority for Shearwood as he tries to get the business back on track, said Nivindya Sharma, senior analyst at Verdict Retail: “Assessing the operating costs of the business – that’s the first port of call.
“Once stock levels have been controlled, Shearwood can then look at bringing the digital presence of the brand up to scratch. Clarks’ website is really dated compared with its rivals, so that should be sharpened to get through to a younger demographic.”
Clarks’ group operating profit fell 59% to £45.8m for the year to January 31, after a combination of “over-ambitious” business plans and an “excessive focus on short-term performance” led to a “significant” amount of excess inventory.
One recruitment source suggested Shearwood’s international experience would be beneficial: “It was going to be very challenging for whoever got the job.
“It’s a complicated business and there are still a lot of family members involved, so it’s tricky, but I think Mike will be able to do it as well as anyone, he has a lot of international experience.”
Shearwood left Karen Millen last September after it scrapped plans for a management buyout.
Footwear sources told Drapers a strong external leader was needed to tackle the problems at Clarks.
One source said: “Mike is a good choice. I think they desperately need a strong leader down there.”
One Clarks stockist expressed surprise at Shearwood’s appointment, given his lack of footwear experience, but added: “They need someone to sort out the business – it is a mess. An external view and someone with a different skill set [outside footwear] might be good for it.”
During 2015, Clarks moved to a channel-led operating model, divided by retail, wholesale, outlets and online, moving away from the previous structure focused on gender-specific product developed in each region.
In addition, the decision was taken to merge the European Union, UK and Ireland teams, simplifying the global organisational structure. As revealed by Drapers in February, this resulted in 170 UK redundancies.