// Clarks turnover dropped 8% in the 2019/20 financial year
// Clarks launched a CVA and brought a new investor on board in November
// The retailer said that the Covid crisis “has had a significant impact on Clarks’ global operations”
Clarks has revealed that the business has been struggling prior to Covid-19, which worsened the lack of demand in footwear.
In the 2019/20 financial year, the shoe retailer saw turnover drop eight per cent to £725.3 million, while recording an operating loss of £14.1 million.
Despite the losses, this was an improvement on the £48.7 million loss in the previous year.
READ MORE: Clarks CVA approved by 90% of creditors
Its loss after tax was £15 million, which was narrower than the £20.9 million of the previous year.
Since the period, Clarks has launched a CVA and brought a new investor on board with the founding family relinquishing control for the first time in centuries.
The turnover reduction came as it sold fewer pairs of shoes overall, “reflecting continued difficult conditions in the UK and ROI retail channel as footfall declines continued”.
In November, Clarks said it needed to push on with a rescue plan in the form of a CVA, which includes no rent on many of its stores.
A total of 90 per cent of creditors – which include landlords – voted in favour of its CVA proposals.
It clears a major hurdle for the rescue of Clarks, spearheaded by LionRock Capital, a Hong Kong-based private equity firm that said a CVA was required if it were to invest £100 million to acquire a majority stake in the 195-year-old business.
The company said that the Covid crisis “has had a significant impact on Clarks’ global operations”.
Meanwhile, Clarks also highlighted that Brexit has impacted the company, with both JD Sports and Ted Baker warned of tariff issues and other costs adding up to between £5 million and £10 million this year.
“Brexit will have an impact on our profitability and cash flow over the foreseeable future and brings risks and uncertainties in a number of areas,” Clarks said.