Down-at-heel Clarks voices fears over sterling
SHOE retailing giant Clarks has warned that the fall in sterling will hit its profits this year despite attempts by the company to revive its fortunes.
The company’s chief executive, Mike Shearwood, said the slide in the pound would have a ‘profound effect’ on cashflow and profit and ‘brings risk and uncertainty’ this year and beyond.
Clarks said sterling’s drop had already affected the firm in a number of ways, but it had not noticed any significant change in shopping habits. However, Shearwood said in the company’s annual report filed last week: ‘The greater uncertainty for Clarks from Brexit is the impact on the UK economy and specifically how consumers react to the expectation of lower economic growth and wage increases, and higher inflation.’
Clarks appointed Shearwood, the former boss of fashion groups Karen Millen and Zara UK, last year to turn the business around amid a rapidly changing retail market.
Profits at the firm fell 43 per cent to £20million in the year to January 31 as it set about restructuring the business and clearing excess stock.
Many high street retailers are struggling to keep pace as more shoppers buy online, making shops less profitable.
Turnover rose 8 per cent to £1.7 billion, largely as a result of selling products overseas at favourable exchange rates.
CONSUMERS and businesses have been warned to watch out for VAT rises after Brexit. While there have been pre-Election promises from the Conservatives and Labour not to raise the level of VAT, accountancy firm Blick Rothenberg said ‘nothing has been said on adding VAT to a whole new range of goods and services currently exempt’, such as most foods, children’s clothing, books, transport and newspapers.