Clarks shoes criticised for £13m payout to founding family before more than 1,000 job losses
- Family shareholders were paid £13.4m of dividends over two years
- This was as the company racked up losses of £114.2m and made job losses
- Unions representing Clarks’ shop workers lashed out at the payments
The founding family of Clarks shoes raked in millions of pounds in dividends months before bosses announced job losses.
Family shareholders were paid £13.4 million of dividends over two years as the company racked up losses of £114.2 million.
The most recent payout of £6.5m came in the year to February 2019 – ahead of 170 job cuts announced in December.
The founding family of Clarks shoes raked in millions of pounds in dividends months before bosses announced job losses
A further 900 redundancies were announced in May 2020, and last week bosses put the jobs of all 4,000 of its shop staff on notice.
The chain’s struggles are in stark contrast to the founding family, who have raked in £176.5 million in dividends in the last ten years.
Unions representing Clarks’ shop workers lashed out at the payments. Unite’s Gareth Lowe said: ‘The lavish dividends being paid out by Clarks to the founding family, at a time of transformational change for the workforce, are unacceptable.
‘This calls into question Clarks’ corporate priorities and will only cause this iconic brand reputational damage that so easily could have been avoided.’
Retail expert Andrew Busby added: ‘The morality of Clarks paying dividends when they’re cutting jobs and making a loss – it doesn’t do them any favours.
‘The pandemic has made us a lot more sensitive to companies misbehaving, whether it’s paying dividends when cutting jobs, or sustainability issues.’
The footwear chain’s struggles are in stark contrast to the founding family, who have raked in £176.5 million in dividends in the last ten years
The shareholders are descendants of Cyrus and James Clark, who started making sheepskin slippers in Somerset 195 years ago.
Last week the family lost control of the company as part of a rescue package that will see new buyers LionRock, a Hong Kong private equity firm, inject £100 million to keep the business afloat.
The sale will go ahead if, next month, creditors vote for harsh rent cuts, as part of an insolvency procedure known as a company voluntary agreement (CVA).
Landlords have reacted furiously to the proposals, which will see 60 stores move to zero rent, accusing Clarks of ‘abusing’ insolvency processes.
They claim they are effectively unable to vote the CVA down, as they only make up a small proportion of Clarks’ creditors.
Clarks was in trouble before the pandemic, as losses widened to £82.9 million in the year to February 2019, up from a £31.3 million loss the year before.
It sold 20 million pairs of shoes, 2 million fewer than the year before, causing sales to slide 6pc to £1.4 billion.
The firm has struggled as shoppers moved online and from rising costs. The company declined to comment.