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Clarks cutbacks and restructuring with McKinsey

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Struggling British shoemaker Clarks, which saw a loss of £82.9 million in fiscal year 2018-19, is cutting jobs in an effort to right the ship by its newly appointed CEO Giorgio Presca.

About 170 employees worldwide are being let go, including 80 at the company’s headquarters in Somerset County.
Clarks may also have to close more of its 1,000 stores worldwide as part of its restructuring.

The legendary and centuries-old British shoe retailer Clarks, founded in 1825, also appointed McKinsey to accompany him on a vast transformation plan. This is an opportunity for CFO Paul Kenyon to leave the company to join the private chain Independent Vetcare; Philip de Klerk, the former CEO of Low & Bonar, is expected to replace him on an ad hoc basis.

This mission for McKinsey will focus on both the profitability of the business and the renewal of the brand’s relevance to consumers and partners in a complicated context. Clarks, which has 553 stores in the UK and Ireland, and nearly 12,000 employees, reported an after-tax loss of nearly € 100 million in 2018. In February 2019, Italian Giorgio Presca, ex-CEO of Geox, was appointed as the new CEO. As early as March, the retailer announced plans to close its last UK factory at Street in Somerset, failing to meet its targets.

For Clarks, and consequently for McKinsey, the stake, and the challenge, is to design new emblematic products, to launch a new brand worldwide, and to put in place a new strategy to bring the company back to sustainable growth and profitability levels by 2023.

 

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