British footwear brand Clarks sees 20% drop in sales due to Covid-19 outbreak

By: |
April 16, 2020 8:28 AM

The company has not cancelled any orders but has held back some orders due to the virus impact. The e-commerce pie of the company is expected to grow.

british footwear company, clarks footwear brand, coronavirus impact, coronavirus outbreak, impact of coronavirus outbreakClarks has presence in around 400 large format stores and has plans to scale it up to 550 this year.

The sales of iconic British footwear brand Clarks has been badly affected in India because of the Covid-19 outbreak. The situation has necessitated holding back its expansion plans, the company said.

There will be around 20% drop in sales in 2020, the company observed, assuming that the market would bounce back to normalcy by June-July. Clarks said its planned journey to reach the first goal of 3 million pairs by 2023 could be delayed by a year.

N Mohan, executive director & CEO of Clarks Future Footwear, the Indian JV arm of Clarks, told FE: “Looking at the current scenario, we will do 15% to 20% lower than last year in terms of pairage compared to our planned growth of 30%. We are confident that a strong brand like Clarks will only emerge stronger.”

According to him, the company usually achieves 35% to 40% of the whole year budget in the first six months and the second half is where it does bulk of the business. Clarks follow a financial year from February to January. Last year, from February 2019 to January 2020, the company had achieved 45% growth in sales over the previous year, by selling 8.7 lakh pairs of footwear. For this year, it has targeted to achieve 30% growth by planning to sell 1.2 million pairs.

“The first three months of our financial year have been a complete washout. The remaining nine months will now be crucial for us and we are looking at various scenarios. Scenario one is where we will be allowed to work from June onwards and scenario two is where we start opening our stores by July or even afterwards. Our business solely depends on brick and mortar model. We have our own 52 stores and also signed up for 16 more, between our own and franchises. It all depends on when we would be able to start functioning,” he said.

Clarks has presence in around 400 large format stores and has plans to scale it up to 550 this year. “Due to Covid -19, we may not be able to reach 550, but we will add another 50 stores for sure. Likewise, we will add another 50 or 60 to the existing 200-strong mom and pop stores,” he said.

Mohan said his understanding is that after Covid-19, consumers will look for authenticity and well-being as an important attribute to look for in a brand.

“Our brand being aspirational, embodies both authenticity and well-being, and has a good opportunity in the near scenario emerging after Covid-19. We believe that better foot health leads to positive mental health. All our footwears are designed for the feet to move freely. For us, the foot health is paramount as all the nerves of the body end there. All these nerves have a direct connect to various vital organs of the body. We take care of every aspect while creating our shoes,” he said.

Close to 55% to 60% of Clarks products are produced in India and it is an important sourcing destination for the global sourcing team. “We are a major partner to the Indian footwear industry. All our partners have affirmed faith in the brand, even in these trying times,” he said.

The company has not cancelled any orders but has held back some orders due to the virus impact. The e-commerce pie of the company is expected to grow.

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