Clarks heir slams family for taking eye off the ball at retailer, praises new owner
A member of the Clark family, which is soon to relinquish sole ownership of the near-200-year-old Clarks UK-based footwear firm, has blamed them for letting the business almost disappear from the retail landscape.
Galahad Clark, a seventh-generation family member, told the Sunday Times the business had failed to “move fast enough into the 21st century” and his family are “ultimately are to blame” for "not investing enough in its future”.
Last month, Clarks secured £100 million in funding from LionRock Capital which will see the Hong Kong-based investor take a 51% controlling stake in the business this year. It was the final part of a rescue packaged that hinged on Clarks securing a Company Voluntary Arrangement (CVA) to slash rents and prevent the 260-store retailer from collapsing.
According to LionRock, the agreement will enable Clarks "to position the business for future long-term sustainable growth and deliver its strategy to revitalise the brand" after being hit hard by the Covid-19 pandemic.
But Galahad Clark said the business, which posted £84.4m losses on £1.5bn of sales in 2018-19, had suffered from a “fragmented family ownership” that meant it had lacked strategic direction under a series of external chief executives. Meanwhile, the shareholders were "happy to bank dividends", he noted.
While admitting Covid-19 was a big issue, Clark also said it was not the primary reason for the problems at the company. He said it had failed to build a big online presence: “They just hadn’t moved forward fast enough”.
He told the newspaper that bosses “had inherited a pretty fat cow full of milk”, but took “more milk than they put back in”. The family owners, meanwhile, were “guilty” of “accepting as much milk” as they were given and not “nourishing” the business.
But despite the long-term issues at Clarks, he said the LionRock deal provided “a lot of exciting opportunities”.
“Truth be told, it probably needed new owners, and of all the owners in the world, these look like pretty good owners”, he added.
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