Case study – Clarks to stay private after ruling out float

C.J. Clark , the shoemaker and retailer that earlier this year was planning to ballot the Clark family on a possible public flotation , is to stay private .
Roger Pedder , chairman , said yesterday the board had received overwhelming advice against trying to float the company , which had no need of capital to fund further expansion . The board and the shareholder council , which represents 72 per cent of the shares , had agreed that a ballot would be ‘ effectively a waste of time ‘ .
The company , founded by Quakers in Somerset 175 years ago , has grown into one of the UK’s largest private limited companies . It came within five votes of opting for a takeover by Beresford in 1993 after a decade of declining fortunes . But in April it announced profits on continuing operations before exceptional items up from £ 42.7m to £ 50.8m on sales of £ 825m . That was its third year of record profits , reflecting its strategy of reducing its reliance on own manufacture and investing in its brands and shops .
Clarks is now more of a retailer and wholesaler than manufacturer , owning or franchising 650 shops and importing shoes from abroad . Five years ago , 75 per cent of its shoes were manufactured in Clarks British factories . Now it is just 25 per cent , with 40 per cent of the business based overseas .
Tim Parker , chief executive , has claimed that Clarks is the largest conventional shoe brand in the world , having sold 38m pairs last year . Yesterday he said the business was ‘ firing on all cylinders overseas ‘ and continuing to buck the trend in UK retailing .
‘ I am confident that we can continue to build the business as the benefits of moving to lower cost sources come through , along with investment in our brand and retailing operations . Despite ruling out a float for now , the company said it would continue periodically to examine ‘ the most appropriate legal structure to meet shareholders ‘ interests in the light of its strategy for future growth and the prevailing market conditions ‘ . _{^{Source : David Blackwell , Financial Times , 7 October 2000}}