Clarks: Made to Last

by Mark Palmer

  Collett Dickenson Pearce’s director on the Clarks account was Geoff Howard-Spink, who went on to become one of the advertising world’s elder statesmen. ‘The advertising, when it appeared, was unlike any shoe advertising that Clarks, or the shoe industry, had seen before,’ said Howard-Spink, writing for Inside Collett Dickenson Pearce, an illustrated book about the agency published in 2000. ‘The quotes for photographs were staggering. For the price of each press ad you could have shot a television commercial. It was very difficult to explain these prices to Clarks, a Quaker family with a shoe business.’

  In 1979, a CDP advertisement for Clarks’ ‘Cornish pasty’ shoe – so named because of its thick, gently curved edges that reminded people of the popular crusty pie – was shortlisted for an advertising award. These shoes had Polyveldt soling and the copy in the advertisement explained how Polyveldt, known in the trade as PV or PU, was made of Contura, a polyurethane exclusive to Clarks.

  Apart from durability, Contura gives the Polyveldt sole its flexibility and lightness (Contura is actually half the weight of leather or crepe) … we hope you’re an ordinary man in the street and, having read this far, will rush out in search of a pair of Polyveldt of your own.

  Then came the waspish line:

  Should you, however, be a rival shoemaker, we’d like to draw your attention to the fact that British and foreign patents and designs are pending or granted. And that Polyveldt are protected by UK Reg Design Nos 967050 and 967051 and Irish Reg Design Nos D3665 and D3664.

  Clarks remained with CDP until 1981, when Geoff Howard-Spink and his business partner, Frank Lowe, left to form their own company, Lowe Howard-Spink.

  Clarks new Polyveldts – successors to the so-called ‘Cornish pasty’ shoe.

  Developing the Clarks brand was not just down to advertising and graphic design. In the late 1960s, the company hired a market and social research company called Conrad Jameson Associates to advise on Clarks’ image and its positioning among consumers. Conrad Jameson was an American living in London who had studied philosophy at Harvard. One of his junior staff was Peter Wallis, who, using the name Peter York, went on to co-author the bestselling Official Sloane Ranger Handbook in 1982. When Wallis left to found his own company, the Specialist Research Unit Ltd, with Henry ‘Dennis’ Stevenson (now Lord Stevenson) in 1973, he reached an amicable arrangement with Jameson, whereby the Specialist Research Unit took on the Clarks account.

  Wallis spent the next twenty years advising Clarks, sometimes intensely, sometimes more loosely. He worked closely with Lance Clark, Robert Wallace and Michael Fiennes, a cousin of Sir Ranulph Fiennes, the adventurer and writer.

  Michael Fiennes had joined Clarks as a graduate trainee in 1963 and was universally credited with having a first-class brain. One member of the Clark family says he was ‘probably too bright for us’. After graduating from Oxford University with a degree in philosophy, politics and economics, and with the encouragement of Tom Woods, Clarks personnel manager, Fiennes secured a place at Harvard Business School. On his return in 1968, he was fast-tracked into management, working in marketing and then moving to Australia as marketing director in 1971. He returned to Street in 1973 as head of marketing and strategy and became corporate marketing manager of Clarks Ltd, with a seat on the board. However, he was never promoted to the main C. & J. Clark board. He remained with the company until 1982, when, without any warning, he suddenly resigned. ‘It was a great shock’ says David Heeley:

  He had the brain-power to help steer the company through difficult times, but it must have seemed to him that there was little chance of getting on to the main board because it was top-heavy either with family members or long-term retainers, who had done a great job but perhaps were no longer at the top of their game.

  The loss to Clarks was highlighted when, within a few months of his departure, Fiennes set up his own company and won the exclusive UK rights to sell and distribute Ecco shoes, a leading boutique brand from Denmark. This deal lasted seventeen years and was extremely successful, only coming to an end when Ecco launched its own international sales force. In the early 1990s, Fiennes opened Ecco’s first shops in Kingston and Bromley and by 1999 there were fifteen such outlets. He and his wife Rosalie, an architectural interior designer, went on to set up the retail shoe and clothes company Shoon.

  ‘Making shoes was part of Clarks heritage and it was difficult for some members of the board to contemplate anything else,’ says Fiennes. He continues:

  But even if we had thought about bringing in shoes from overseas and concentrating more on wholesaling than manufacturing we were not prepared for it. It was never clear where the company was going long-term and members of the family were pulling in different directions. Even so, I never found another company that I preferred to work for. Clarks was not afraid of looking at new things and always wanted to be at the forefront of change. I used to see Daniel for strategic discussions and I liked him enormously. He was bright and wanted to do the right thing but he didn’t have the authority of his father [Bancroft] over other members of the family.

  Wallis’s experience was similar:

  My role was to present the outside world as a sounding point. We did a lot of research that always confirmed the same thing: either Clarks should stick to its core business or, if it wanted to become a fashion item, then it had to do it very well. I argued that you have to find your sweet spot and stick with it. The frustration for me was wanting them to act faster and to understand design better. A great deal of the design came from barmy enthusiasm rather than inspired imagination.

  Pride was felt keenly at Clarks over its technological advances. As one former senior manager puts it: ‘The genius of the company was that it came across as middle of the road when in fact it was at the sharp end of shoe production and never afraid of new techniques, new innovations.’

  The use of computer-aided design (CAD) and computer-aided manufacturing (CAM), developed by Tony Darvill in Street, was a case in point. It offered for the first time the ability to design a shoe from start to finish on screen via an integrated three-dimensional (3D) and two-dimensional (2D) computer software package. The dimensions of a last were digitised and the software allowed the designer to examine and alter the cut of the shoe, its decoration, heel and sole edge, and to see his work from each side, from above or from the back. The designer could also experiment with different colours or colour combinations, effectively doing away with the old trial-and-error method whereby experimental shoes were made from scratch.

  CAD (computer-aided design), as seen in this design from 1990, was developed in Street and widely used throughout the Clarks business from the late 1970s onwards.

  Darvill was working in Clarks’ research and development department when he first started developing his ideas in the 1960s, long before the invention of desktop computers. 3D modelling was the subject of in-depth research at Cambridge University’s computing laboratory in 1965 and, towards the end of the 1960s, Citroën, the French car manufacturer, made strides in computing complex 3D curve geometry. Darvill was known as a genial eccentric with a forensic eye for detail, who had knowledge of aircraft and car manufacturing and applied his engineering skills to shoemaking. His fascination with footwear sprang in part from wanting to know what kept a straightforward court shoe securely on a woman’s foot.

  ‘In my mind, the court shoe is the optimum shoe design,’ said Darvill in an interview in 1995. ‘It has no laces or straps, it only covers a small part of the foot and yet it fits comfortably and remains on the foot during walking.’

  Darvill set about perfecting the design process, providing a capability to flatten the last in a consistent and repeatable manner. This allowed for communication between designers, pattern engineers, component suppliers and production managers, even if they were based in different parts of the world. They were sharing exactly the same information.

  ‘Shoemaster’, as Darvill’s product was called, was given a boost in 1977 when Clarks collaborate
d with the Computer Aided Design Centre (CADC) in Cambridge and made a presentation to the Clarks board. Not long afterwards, CAD/CAM teams were assigned to a number of Clarks factories and the software was eventually sold to other shoe manufacturers in the early 1990s.

  One of the first companies to show an interest in the product, after seeing it at a trade fair in Germany, was Torielli, an Italian firm southwest of Milan that specialised in shoemaking equipment and had direct contact with shoe manufacturers across the world. Clarks and Torielli joined forces on the Shoemaster project in a 50–50 joint venture, and then in 1996 Shoemaster became independent of Clarks and formed a new company with Torielli called CSM3D. The final Clarks shares in CSM3D were sold to the new management team in 2003 and CSM3D now owns the intellectual property rights. Its UK headquarters is still in Street, and Ian Paris, the chief executive, is a former Clarks employee. CSM3D produces four new versions of its software a year and sells to companies such as Bata, Gucci, Chanel and Bally. Relations between CSM3D and Clarks remain close and Darvill would be a contender to occupy a plinth in Street if the opportunity were to arise.

  No one could accuse Clarks of not trying to diversify. Indeed, some would say it tried too hard. The launch of a children’s range of clothes in 1979 was a leap too far. Clarks had begun thinking about embarking on this operation in March 1977, with Wallis’s Specialist Research Unit producing a favourable report on it six months later. In December of that year, the board agreed that there was an opportunity to sell ‘well-designed products … to those mothers who want something different from chain store offerings but at a price below specialised suppliers’. According to the planning department in Street, the aim was to secure 1 per cent of the total market share, which, it was estimated, would generate £4.5 million a year at 1976 trade prices. A children’s clothing manufacturer, Pasolds, would be ‘approached to assist in development and manufacture’.

  Malcolm Cotton held a series of senior managerial roles at Clarks from the 1960s onwards, and was briefly managing director of the company in 1995.

  The results were sobering. It made losses of more than £300,000 in its first year of trading in 1979, and a loss in excess of £350,000 in 1980, before being withdrawn in 1981. Norman Record, Clarks group economist, sought to explain the failure of what was called the ‘Children’s Clothing Project’ in a document written for Daniel Clark. He said it was

  … clearly not well managed … the combination of entrepreneurial qualities necessary for success in new projects of this kind is likely to be very rare in a largish organisation like ours. Our ability to launch such projects must thus be recognised as extremely limited.

  Record went on to say that if Clarks is to ‘succeed in a large market we must devote appropriate resources and set our sights sufficiently high. Half-hearted attempts are bound to fail.’

  This set-back followed the closure in September 1978 of Silflex, one of Clarks’ original factories in Street. To the outside world, this was an inevitable development, softened by the announcement that most of the 230 workers would be relocated to other factories in the West Country – but for Clarks it was an emotional wrench that was hard to bear because it struck at the heart of the company’s manufacturing history. The original Big Room, where shoes had been made since the turn of the century, had been silenced.

  Most people, even members of the National Union of Footwear, Leather and Allied Trades (NUFLAT), had realised for some years that the sums did not add up. At one time in the early 1960s, some 22,000 pairs of women’s shoes were being made each week in Street. By 1978, that number was down to 7,000 pairs. Even so, the closure came as a shock to employees who gathered in the Strode Theatre on a Tuesday afternoon that September to be told the news by Malcolm Cotton, then divisional general manager for women’s shoes.

  The Courier reported Cotton as saying:

  This has happened because over the years the needs of our customers have changed, and despite every effort to move with the times, we have not been successful in finding the right products.

  At one point in the meeting, a long-term employee confronted Cotton. ‘If it wasn’t for my father and grandfather you wouldn’t have a job today,’ he said. Cotton replied:

  I do not accept that I sit here today owing my job to anyone’s father or grandfather, because if I was not doing this job then I would be doing something else … I simply believe there is a job to be done, however unpleasant, to try and get the best results for the company and its employees in the long term. We must work for the present, plan for the future and not contemplate the past.

  Cotton was not a family member, but he rose to become managing director of C. & J. Clark Ltd in the 1990s. He joined the company in 1965 from Procter & Gamble as an internal consultant and within six months was put in charge of the Silflex factory. In the early 1970s he worked in Ireland, before returning to Street, first as head of the men’s division, then of the women’s division.

  Reflecting on the Silflex closure, Cotton describes it as a ‘seminal moment’, while Lance Clark, who was managing director of Clarks Ltd at the time, says it was a ‘horrible thing to do’ that went completely against the Clarks belief in secure employment. But, says Lance:

  … it was the right thing to do, and looking back we should have closed more factories much faster … We should have been hard-headed about it. One of the reasons we dragged our feet was because it would cost us £1 million every time we closed a factory. In the accounts the costs of closing factories came out of trading profits so there was a positive disincentive to take the necessary painful decisions.

  A combination of rising raw materials, a flattening national economy and changing fashion trends that Clarks was struggling to keep up with began to take its toll. On 22 August 1980, the company announced the closure of Trefano, the factory in Wales, and its satellite unit, White Rose, with the immediate loss of 390 jobs. In addition, there were redundancies at the Dundalk factory, in Ireland, and at the Vennland factory in Mine-head. Only a month earlier, there had been job losses in Street, Yeovil and Weston-super-Mare, so that by the end of 1980, the total workforce in Clarks UK factories had fallen by nearly a ninth from 8,500 to 7,700.

  Daniel Clark was running the company at a dispiriting time for UK businesses. In 1979, when Margaret Thatcher came to power, inflation was in double figures and unemployment was at a post-war high of 700,000. Government debt required borrowing from the IMF.

  Internally, it wasn’t easy either. The larger a family business becomes the more complex it is to run, the more onerous to resolve differences among shareholders. The Institute for Family Business says that only 13 per cent of family businesses survive to the third generation, but by the late 1970s Clarks was a fifth-generation family, albeit burdened by many of the inherent disadvantages that come with such a long history. It was only in the 1990s that Clarks started to make the transition from being an owner-managed company to being family-owned but employing professional managers to run the business. The obstacles facing Daniel were immense in comparison to those of, for example, his great-grandfather, William S. Clark, who was the overwhelming majority shareholder with the freedom and authority to make decisions as he saw fit.

  Daniel did not attempt to disguise the challenges. When pre-tax profits in 1980 fell to £8.7 million, some 30 per cent below those of 1979, he described them as ‘very disappointing’. The Courier also was straight to the point: ‘The best thing that can be said about 1980 is that it is over.’

  Relations with K Shoes – which had been founded in 1842 by Robert Miller Somervell – had always been close, and would become even closer by the end of 1980. Without warning, but operating within the guidelines on mergers and take-overs, Ward White, manufacturers of Tuf, Gluv, John White, Portland and several other lower-priced footwear brands, launched a hostile ‘dawn raid’ for K Shoes on 21 October 1980, acquiring a 14.85 per cent stake. Ward White paid 60 pence a share, when K Shoes shares had been trading at 47 pence. Clearly, a full bid wa
s in the offing. Ward White was slightly bigger than K Shoes, with a market capitalisation of around £16 million compared with K Shoes’ £14 million. It had 100 shops, trading as Wyles, and had recently bought twenty retail outlets in Sweden and 50 in North America.

  On the afternoon of 21 October 1980, the K Shoes chairman, Spencer Crookenden, and his managing director, George Probert, met their counterparts at Ward White, who were George McWatters and Philip Birch. McWatters and Birch spoke, Crookenden and Probert listened. The news went down badly in Street. K Shoes was a big brand and the Clarks board did not want it to fall into the hands of competitors. The next day, Daniel Clark telephoned Crookenden to say that Clarks felt compelled to make a counter bid. On 23 October 1980, a meeting was convened at the London offices of Schroders merchant bank, attended by Daniel, Lance and William Johnston, from Clarks, and by Crookenden and Probert from K Shoes. Crookenden stressed how he wished K to remain independent, but if this proved impossible he would rather be in business with Clarks than Ward White, provided K Shoes could maintain its own identity.

  ‘We were much impressed by the character of the Clarks directors, and we particularly admired the quality and total trustworthiness of the chairman, Daniel Clark,’ wrote Crookenden in his book K Shoes: The First 150 Years, 1842–1992.

  The next day, Crookenden issued a statement to all K Shoes’ employees, explaining the firm’s position and ending with a plea that ‘we should all continue to work normally’. Evidently, the one person not working normally was Crookenden. First, he had to appoint a new merchant bank because Clarks and K Shoes shared the services of Schroders. Clarks had been with Schroders the longest, and so it was left to K Shoes to make a new appointment. It was agreed that Kleinwort Benson would take on this role, with Lord Rockley as the senior adviser. Further negotiations ensued with Ward White, after which K Shoes promised to make a definite decision within seven days. That decision was taken on 4 November 1980 in favour of the Clarks bid. As Crookenden explains: