Clarks: Made to Last

by Mark Palmer

  Alan Devonshire, West Ham United’s star midfielder who won eight England caps, was reported to have bought a pair of Air-Comfort shoes from the Stratford store after suffering an injury to his heel and needing a shoe to speed his recovery – and before long, the whole of the West Ham first team squad was kitted out with air-cushioned shoes when travelling as a group to away games. This kind of endorsement was taken a step further and given another sporty twist in the autumn of 1985 when the children’s division launched a £500,000 back-to-school advertising campaign starring famous athletes and their mothers. One featured Sandy Lyle, who had just won the British Open Golf Championship at Royal St George’s, swinging a club, with an inset picture of him and his mother taken when he was a small boy. ‘We looked after his feet from the very first tee’ read the copy. Another showed the British number one women’s tennis player, Annabel Croft, administering a ferocious forehand: ‘She may get tennis elbow but she’ll never suffer from foot-faults.’

  Any potential surge in sales from Clarks’ investment in retail was to be assisted by the new £3 million extension to the Bullmead warehouse, which attracted widespread attention in the media when it opened on 21 August 1984. HTV’s Report West programme devoted a full ten minutes to Bullmead’s computerised conveyor belt system that could sort 400,000 pairs of shoes a week. BBC’s Points West and the Financial Times also expressed interest, the latter running the headline: ‘Clarks automated shoe shuffle’. Working with a US-based automation company called Rapistan Lande, the system used laser scanners to read barcodes on shoebox labels, sorting up to twelve sizes, four fittings and five colours of shoe and then routing them to the correct van at what was called the ‘goods outwards’ bays. Speed was of the essence because Clarks operated a by-return replenishment service to its stockists. This meant up to 100 orders could be processed at any one time, with 50 chutes on one level and 50 on another. Productivity at Bullmead increased by up to 20 per cent and the new system meant 50 fewer people were working at the warehouse than there had been three years earlier.

  A 1985 press advertisement for the new Air-Comfort shoes. The West Ham United football team was equipped with these for travel to away games.

  But for all these new shops, advertising campaigns, star endorsements and technological breakthroughs, the business as a whole was in danger of stagnating. Indeed, some members of the board and several senior shareholders felt that stagnation already had occurred. New organisational structures were introduced, but traditional attitudes remained engrained. Daniel Clark, the chairman, appeared to some to be reluctant to bring in managers from outside the family and slow in sourcing shoes from abroad. But some would point to the constraints he faced by virtue of the number of family members on the board and working in the business, and the widely held belief that it was not possible to get the same level of quality from buying-in as you could from producing shoes in factories at home. Others took the view that if the factories in the southwest of England were to be competitive it would require taking out so much labour from the manufacturing process that quality would suffer.

  The closure of factories should have happened faster, but Clarks was not alone in grappling with Britain’s decline as a manufacturing-based country. As Daniel noted in the 1984 Chairman’s Report,

  … these actions have been difficult to decide on, involving as they do large numbers of people whose employment we have had to terminate, quite often people with long years of service to the Company.

  As it was, arrangements were made during 1984 to close Dundalk, in Ireland, where shoes had been made since 1938 following an agreement with the Halliday family to produce Clarks under licence. This was a wrench. Clarks had taken full control of Dundalk in 1972 and relations with the company were close, with Daniel Clark, Lance Clark, Anthony Clothier and Malcolm Cotton all having spent time there as managers. Dundalk was something of a training ground where young executives could cut their business teeth.

  In addition to the closure of Dundalk, what Daniel called a ‘disastrous year’ in America – due in part to the rising value of the dollar – led to the demise of three factories and all Peter Lord shops in the United States and a cutback at Big Sky, a chain of specialist stores selling leisure lifestyle footwear. One of the factories to shut was the original Hanover Shoes plant in Pennsylvania, which had opened in 1910 and at one time had employed 800 people, producing men’s formal welted shoes.

  Clarks’ grip on the North American market in the mid-1980s was so shaky that the British Shoe Corporation expressed an interest in acquiring its retail interests there, but, instead, Clarks began courting Hanson Trust and Ward White, the latter being the company previously thwarted in its bid to buy K Shoes. William Johnston, who had been a prime mover in the original acquisition of Hanover some ten years earlier, was involved in these negotiations, but both approaches came to nothing. The price was deemed not right. Instead, some struggling Hanover stores were closed, while others moved to smaller units where rents were cheaper.

  The 1984 shareholders’ report showed that the social responsibility component to the company was still very much alive, still central to the Clarks ethos. After being set up more than twenty years earlier, the Clark Foundation now had investments worth more than £3 million. That year, grants totalling some £120,000 were awarded to a variety of good causes. For example, Halfway House Bridgwater, a rehabilitation centre, received £31,000, and £13,000 was given to Nature Conservation. Smaller donations were made to a number of local charities such as Talking Newspaper for the Blind, in Plymouth, and the Somerset Youth Association. Daniel made a point of reminding the family about its Quaker commitment to helping ‘charities of a local nature, local that is to places of major employment by us’.

  And despite rumblings from some shareholders about the company’s overall performance, pre-tax profits for the year ending January 1986 were more than £30 million, 43 per cent up on the previous year, although boosted by property sales and by so-called ‘pension contribution holidays’ whereby the company did not make any contributions to the pension fund because its assets exceeded the requirements of the pensioners.

  This result was achieved on the back of what Daniel called a ‘most unsatisfactory situation’ in America, particularly in retailing. However, he stressed that of the 20 million pairs sold, all but 6.5 million were made in the company’s own factories. ‘Our policy is to concentrate our own manufacturing effort on products where we can offer something unique which can command a premium price. The pitfalls of resourcing abroad are legion,’ he told shareholders.

  All and any changes to the board – and there were quite a few – between 1985 and 1987 should be seen in the context of the rise to power of George Probert, who had joined the board in 1980 on the acquisition of K Shoes. In the spring of 1985 there was a flurry of top-level appointments. Malcolm Cotton was sent to Australia and made a director of C. & J. Clark Ltd, and John Clothier was appointed chief executive of Clarks Shoes Ltd, a new company formed to unite manufacturing and retailing for the first time. He too was given a seat on the board. Of his appointment, Clothier says:

  The thing is that I had always regarded myself as an outsider … I did not understand the family politics and my father [Peter Clothier] certainly never talked about it. I suppose I just tried to get on with turning a profit – although the fact that sales were good or not so good at that time was neither here nor there. It was the strategy of direction which was not being correctly spelled out.

  Clothier’s task was exacting. The pressures on manufacturing were such that specification had to be taken out of the shoes to make them cheaper for consumers, but by doing this there was a danger of losing the essence of a shoe made by Clarks. Conversely, sourcing shoes from outside the UK became a growing imperative, but the options available were nothing like what they are today. China had not opened up economically and the Iron Curtain was still firmly in place.

  Other new board appointees in 1985 included Alan Mackay, the fin
ance director, along with David Hawkes, from K Shoes, who was made chief executive of K Shoes Ltd, responsible for the company’s manufacturing and retailing. At the same time, Probert was given the title of Group Managing Director of C. & J. Clark Ltd.

  Jan Clark, Richard Clark and other members of the family remember Probert boasting that he would ‘get rid of the family’ – and he made a reasonable fist of it. At one point, according to the minutes of a meeting in 1986, he spoke about the ‘problems of having [family] board members who were not good enough’. Blunt and outspoken, Probert was not cut from the same cloth as his colleagues at K Shoes, who tended to be public school and ex-army. The son of a miner, he had risen through the ranks at the Kendal company after joining as a graduate trainee in 1948. He had been a shop assistant, a shop manager, advertising manager and then retail manager for the whole company, taking over from the long-serving Stewart Nicoll in 1962.

  Probert had been a successful managing director of K Shoes. He insisted that all directors spend time selling direct to customers in the company’s shops and decreed that they should participate in any ongoing retail training known as Fitting Weeks. According to Geoffrey Holt, who also joined K Shoes as a trainee in 1948, Probert was a hard taskmaster. ‘It was never easy working for George,’ Holt is quoted as saying in K Shoes: The First 150 Years, 1842–1992 by Spencer Crookenden.

  Immaculately dressed and always wearing formal, polished welted shoes, Probert found the informality at Clarks infuriating. It was not his style. Neville Gillibrand, while head of the men’s division, remembers attending a meeting in Street with Probert and other senior executives. It was due to start at 1 pm. Gillibrand arrived at 1.05 pm to find Probert leaving the room. Gillibrand, who still works as a ‘style consultant’ and is chairman of Clarks Pension Trustees, describes the scene:

  He was spitting tacks. He said to me: ‘I just don’t understand the thinking around here.’ And I replied that it was the same thinking that showed how K could never make casual shoes and why Clarks could never make formal shoes. We were just completely different. He was from another world and it was hard to get on with him. We had opposing views about everything. George was a serious professional manager but his way of working was at odds with the Clarks culture.

  Jan Clark had known Probert for a great number of years before the K Shoes acquisition. ‘He was a difficult man,’ says Jan. ‘He thought we Clarks always got where we were through nepotism – and I suppose we did. He despised privilege wherever he perceived it.’

  Probert wasted no time in asserting himself as managing director. At first, he turned his attentions to the United States where he poured scorn on Jan’s decision in 1981 to move the US headquarters to new premises in Kennet Square, Pennsylvania, at a cost of $4 million. In a letter to a senior Hanover executive, he likened Kennet Square to an ‘ivory tower … very impressive but very remote’. Then he wrote a candid letter to Ron Mullins, the head of Cegmark International, a New York-based consultancy used by Clarks for issues relating to North America, bemoaning the stock problems in America that he estimated would cost the company $2 million.

  Probert said that he would consult the rest of the board about the American operations and then make a decision.

  My first inclination is to clear out the lot of them. On consideration, however, that seems impracticable. So I shall be faced with the delicate decision of whom to keep and whom to send packing in a situation where the right answer for every single one of them would be dismissal.

  In fact, Jan Clark survived longer than Probert had intended. He was finally removed from his post as managing director of C. & J. Clark America Inc. in June 1986, but remained on the main board as a non-executive director until March 1987. It would seem that Jan was being held to account for the difficulties in North America, where trading losses of 21 per cent were announced by Big Sky in 1985, leading to the board agreeing that 31 of 60 Big Sky outlets would close. There was bad news, too, in South Africa – now part of Clarks Southlands subsidiary, which included Australia and New Zealand – when in January 1985 the factory in Pietermaritzburg closed, leaving 350 employees without jobs. This was blamed on the South African recession and when viewed in isolation was perhaps not too drastic, but retailing in both Australia and New Zealand was also on the slide, with the latter experiencing its worst year in a decade.

  On leaving Clarks, Jan remained in the United States and did not set foot in England for five years. ‘When you get fired, you’re sore. There’s no way round that. It meant I had to choose a different course. My mettle was sharpened by the experience,’ he says. Jan went on to launch a successful real estate company in Delaware called Land Star Inc. and still lives in the US.

  There were a number of proposals floated to change the make-up of the board. One was that Roger Pedder, Bancroft’s son-in-law, who had left the company in 1970 and who had wide experience in retailing, be approached to become an executive director, with his exact role to be determined once he had accepted the post. That got nowhere. In the meantime, scheming in the shadows seemed to become a way of life for some members of the family.

  Daniel found himself stymied by a poisonous mix of board-level discord, national economic uncertainty and cripplingly high inflation. Even those who disagreed with some elements of his stewardship recognised that he was in an intolerable position. Some men might have walked away altogether on realising that their authority was perpetually being undermined by family tensions and corporate indiscipline. There had been an additional blow when Tony Clark, one of the family’s elder statesmen – and Lance’s father – died in February 1985. Tony, a former chairman of C. & J. Clark Ltd, was regarded as a stabilising and civilising force. He had been a magistrate, chairman of the local police authority and High Sheriff of Somerset. The death of this decent man was another blow to hopes of reconciliation among the warring factions. Bancroft, in a letter to his son, Daniel, shortly after this sad turn of events, spoke of Tony’s ‘shrewdness’ and described him as one of ‘the solid continuing family shareholders’ in Clarks.

  Daniel needed support. In the autumn of 1985, he telephoned Malcolm Cotton in Australia to explain his predicament. Cotton jumped on a plane the next day – and remembers attending some ‘ferocious’ board meetings over the next few months. John Clothier, who, like Cotton, was newly appointed to the board, was aware of moves against Daniel, but says he was ‘not very clear what the benefits were going to be in replacing him’, particularly with Probert still in power.

  ‘Probert’s main interest was in driving manufactured shoes through our own shops and we had many heated disagreements about this,’ says Clothier.

  His presence was always going to postpone the actions that were necessary. He was a bombastic character who simply did not see that the world was changing.

  Daniel, shaken, but determined to battle on, recommended that Clive de Paula should join the board as deputy chairman in November 1985. De Paula was a family member by virtue of his mother, Agnes Clark, the daughter of Frank Clark. As a chartered accountant, he had broad experience in the City and had written a textbook on accounting which remained in print for many years. He was 70 when appointed a director. Daniel hoped he would provide some financial muscle and help sort out the future structure and hierarchy of Clarks.

  Board meeting minutes show hostilities breaking out between shareholders and the executive. In June 1986, one minute spoke of a ‘total failure of communication between the Board and the family shareholding group … [causing] complete distrust on both sides’. There was talk of a two-tier board structure which would give shareholders more authority, but this was rejected. Various family shareholder groupings had begun to make their presence felt. A few months earlier, in a document dated 21 October 1985, the Whitenights group – so named because Whitenights was where Roger (Daniel’s grandfather) and Sarah Clark had lived on the outskirts of Street – produced a paper called ‘Summary on position of shareholders and on manufacturing and trading policies in
the UK’. This missive tracked the decline of profits and called for a ‘rigorous new management with the highest qualifications and experience … the urgency of the task requires that this management is brought from the outside as it does not exist within the company’.

  The Whitenights group included Stephen Clark and his daughter Harriet Hall, Stephen’s brother Nathan, the inventor of the Desert Boot, and Caroline Gould, whose mother was Bancroft’s sister. They concluded that the time had come to ‘convert our business and trademarks from being primarily manufacturing based to being retail and wholesale led, resourcing from our own factories and overseas’.

  Members of the Clark family talk about Probert’s ‘Night of the Long Knives’ during 1986. In fact his cull, carried out with the tacit approval of a majority of the board, stretched over several months, during which he rid the board of three further family members. Officially, they all resigned; unofficially they were removed against their will. First to go was William Johnston in February, followed by Anthony Clothier in May and Clive de Paula in September. Ralph Clark retired as chairman of Avalon Industries, but remained on the board as a non-executive director.