Footwear chains have come and gone in the past 90 years, but family-run Charles Clinkard has stood firm. Its eponymous boss tells us how it has succeeded.
Charles Clinkard might be celebrating the 90th anniversary of the business his grandfather, another Charles, founded in 1924, but he is far from resting on his laurels. Rather, he is busy focusing on the next 90 years, with plans for a £3m Warehouse to cope with the rising levels of stock needed to sustain growth online.
Clinkard, who joined the family business as general manager 25 years ago - he became operations director in 1994 and has been managing director since 2001 - has agreed a deal to open the 55,000 sq ft warehouse and office space - a former B&Q store - in Middlesbrough, just five miles from the current 30,000 sq ft warehouse in Stockton-on-Tees, the lease of which is about to expire.
“The new space will hold a lot more stock. We haven’t worked out all the details yet as the deal is still going through but it will be great for the business,” says Clinkard. “When the deal is done and dusted, it will take us six months to rebuild it so we’re hoping to open it in September 2015.
It’s setting us up for the future and providing us with the opportunity to grow to the next level. What that level is we’re still working out.”
Online sales will account for £6m of the forecast total annual sales of £36m for the year to January 31, 2015, and Clinkard wants to grow this to £10m over the next three years. Total sales to November 1 are currently up 6.4% on 2013.
“Look at the John Lewises of this world and they are doing more than 20% of their turnover on the web. We’re getting close but we’d like to be doing 25% to 30%. That should be the target,” he says.
The business now has 33 bricks-and-mortar stores but wants 40 - Clinkard says the growth will be organic. “When we have money in the bank or if an opportunity comes up then we can take it on, but the business is a nice size, we have a good team of people and the systems we’re working with are very capable of running a business of this scale. If we were to grow much bigger the whole dynamics change again.”
Clinkard has been keeping an eye on which retailers are moving into which international markets, but says he has no immediate plans to expand into new territories, adding there is “plenty of opportunity in the UK first”.
The company also has a wholesale arm, Intershoe. It was set up in 1964 to import and sell sealskin boots, was mothballed in 1969, and reborn as a distributor in the mid-1980s, since when it has acted as UK agent for the Gabor brand, later adding Camel Active footwear and Relax Slippers to the roster. As well as Charles Clinkard, Intersole supplies retailers including John Lewis, Jones Bootmaker, Shoon and Amazon and will generate turnover of £25m this year.
Clinkard admits that joining the business founded in 1924 by his grandfather Charles at 19 Corporation Road in Middlesbrough (the retailer still has a store on the street at number 16, which dates from 1938) was inevitable. “I was born into it,” he quips. However, when he was approached by his late father Roger about joining in 1989, he had his doubts. At the time he had been working for Swiss luxury footwear and leather brand Bally for five years, and had worked his way up to manager of its Regent Street store.
“It wasn’t the easiest time to go back into the business. It wasn’t doing that well and it took me a month to decide. I wasn’t sure I wanted to go back into that family environment; I was enjoying working at Bally so much. That first year we lost £30,000, which doesn’t seem a lot now but it was at the time. We only had six shops and the first job I had to do was close Stockton down, which was an unpleasant task. It was a massive change moving from Bally, which was doing very, very well, and going back into a family business that was finding things challenging. It really was out of the frying pan and into the fire.”
Clinkard used his training at Bally to implement fundamental changes to turn things around. “It helped to move us forward. I brought communication back into the fold. The business wasn’t very open but now all our information is shared among everyone in the company. I like the people in the business to know how we are doing. If we are doing well I want them to know and if we’re struggling they need to know. They are all part of the team; they need to be sharing in the success or, if it is a bit difficult, in the pain as well.”
When he joined he also introduced a lot more branded footwear, bringing own label down from 40% of stock to the current 5%. Women’s brands, of which there are 20 (not including the own label), account for 50% of sales, the 20 men’s brands make up 20% of sales, and the 15 kids’ labels provide the remaining 30%. Own label sales contribute less than 5% to the total.
“When I came in I changed [the brand versus own brand mix] fairly quickly. For whatever reason, if we have brands supplying us it works well, but if we have our own buy we’ve always found it a challenge. We work closely with suppliers and try to grow that business by spending more time with them. We understand the consumer that is coming in and if we can develop product with brands that are relevant to the consumer then it works,” says Clinkard.
“Our relationship with suppliers is very well informed. We see them as partners. We respect them and we get a lot of support from them.”
Bestselling women’s brands include Gabor and Josef Seibel, while for men it is Skechers, Loake and Barker. Clarks and Start-rite make up 70% of the kids’ offer.
“It’s classic everyday comfort that sells well. We have classic brands like Loake, and then more mainstream labels like Timberland. At one end of the scale we have Ugg for the younger shoppers and at the other Van Dal for a more mature customer.”
Tony Linford, managing director of Van Dal parent company Florida Group, says: “From a brand’s point of view there is no such thing as the perfect customer, but Clinkards ticks more of the boxes than pretty much any other reasonably sized retailer. No one is more open to discuss product, brands and their positioning than Charles and his team. My only criticism would be that they don’t have 50 stores.”
Timberland UK country manager Andy Hewat adds: “The best part of dealing with Clinkards is the passion that exudes from every aspect of their business. We’ve always enjoyed our working relationship with them and would like to congratulate Charles and his team on this year’s achievement. We look forward to another 90 successful years of trading.”
When asked who he admires, Clinkard cites fashion chain Next, owing to its stringent rules on discounting. “The best operator in the market without a shadow of a doubt is Next. Simon [Wolfson, chief executive] is a brilliant retailer. Very rarely do they discount outside of Sale period and they are on Sale for a max of two weeks. If others followed their model they would be doing phenomenally well as a business. Next is the pinnacle of retail in the UK.”
When asked why Charles Clinkard has weathered the retail storm for the past nine decades when so many other businesses have failed, Clinkard puts it down to good customer service and understanding what its target market wants.
“If you don’t understand your consumer then you don’t stand much of a chance. A lot of people would look at what we do and say it’s boring. This business is not sexy, but we don’t set out to do that. We know there is a customer out there who is looking for comfort footwear they can wear every day. That’s what we focus on and it works. Sometimes you can’t be all things to all people.”