C&J Clark, the U.K. shoe giant, has announced that Peter Bolliger will retire next year as chief executive after eight years at the helm. Bolliger, who joined Clarks in 1994 and has been chief executive
since 2002, has told the board he wants to retire next year when he is
65.
In May the company bucked the slump among high-street retailers by announcing a 16% rise in annual profits. At the time, Bolliger said that despite Clarks' success, in the final two months of last year the company did suffer “a sharp reduction in sales volumes and profitability'', particularly in North America where it makes just under half its revenues.
Since becoming CEO, Bolliger pushed the expansion of the brand
overseas. The company now has 150 overseas stores, and is looking at
options for reducing its 400-strong UK store network after launching an
online shopping site late last year.
Started in 1825, by Quaker brothers Cyrus and James Clark, as a business making sheepskin rugs and slippers, Clarks is still 81pc owned by the Clark family, with the remaining 19pc held by employees and related institutions. It has operations in the United States, Europe and Asia. Its manufacturing bases are in India, Brazil and China.XX
The announcement will prompt a search for a replacement at a critical time for the £5.6bn UK footwear market.
Declining consumer spending has hit several high street brands. Dolcis and Stead & Simpson were both put into administration in January 2008, followed by Stylo in February this year.
Clarks' UK sales fell in the year to the end of January, but this was more than made up for by increased sales in the North America, Europe and rest of world divisions, which together accounted for just under half of revenues.
Clarks is one of the UK's 50 biggest private companies. About 80 per cent of the shares are held by descendants of Cyrus Clark, who founded the business in Somerset in 1825.
Persistent calls for a stock market listing have been resisted by the company's management.
Mr Bolliger joined Clarks in 1994 soon after leaving his job as managing director of Harrods.
Peter Davies, Clarks chairman, praised Mr Bolliger for “building a strong team around him and modernising the business in organisational terms, in its infrastructure [and] in driving our retail and wider commercial success around the globe”. In the last financial year Mr Bolliger earned £1.3m from Clarks, including a £300,000 performance bonus.
The business as a whole turned over £1.1bn last year, and made pre-tax profits of £87m, a 16 per cent improvement on the previous year, although the operating profit margin narrowed from 9.3 per cent to 8.3 per cent.
Net debt increased nearly 50 per cent to £29.5m and cash flow fell 20 per cent to £69.5m, although Clarks said it remained well within total borrowing facilities of £136.5m.
The net deficit on the company's pension scheme nearly doubled to £114.2m.
At the time of the results, Mr Bolliger, who will return to his native Switzerland on his retirement, predicted that sales would slip in the first half of this year before picking up towards the end of the year. Recovery is unlikely to emerge “until well into 2010”, he said.
