Clark shoes set to miss float deadline

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The Independent Online
C&J Clark, the privately owned shoe company, is facing a showdown with the group's family shareholders after admitting that it may miss the deadline which commits the company to a stock market listing by 1998.

Unveiling a 26 per cent increase in profits to pounds 25m yesterday, Clark's chairman Roger Pedder conceded a delay was possible though the commitment remained unchanged. "We said the company had to be in the right shape and the market had to be right. There is no change to that aim, we are just undecided on the actual date. It might take a little longer. The market is tough out there."

If Clark's does fail to meet the deadline it would need special approval from the family shareholders who still own 70 per cent of the shares. The family agreed to reject a pounds 184m-takeover bid from Berisford three years ago on condition that the company went public within five years.

The agreement was only reached after family in-fighting that culminated in an emergency meeting at the group's headquarters in Street, Somerset.

Mr Pedder has since established a shareholder council and hopes to secure any extension to the float deadline without family rows or a formal meeting. "I think it would now be worked out within the shareholder body," Mr Pedder said.

Clark's has been struggling to re-structure itself in the face of a difficult and over-supplied UK footwear market.

The company has been cutting costs under its new chief executive, Tim Parker, who was recruited from Kenwood earlier this year. Further cuts are likely with some job losses expected. No store closures are planned. A trial children's store format will start in May and a new international store will be tested in the United States later this year.

Clark's pre-tax profits increased by 26 per cent to pounds 24.8m last year on sales up 5 per cent to pounds 721m. Profits were boosted by income from property disposal which will not recur.

Underlying profits from the core shoe operations were down sharply due to a tough market and serious disruption within UK manufacturing. US profits collapsed from pounds 3.6m in 1994 to just pounds 690,000 last year.

There have been a number of senior management changes. Malcolm Cotton, the former managing director who left last year, received pounds 460,000 compensation for loss of office as well as a fee for consultancy work undertaken during 1995.

Two other directors, John Clothier and Patrick Farmer made a combined total of pounds 700,000 from the exercise of share options before leaving the company. These issues are likely to increase tension with the family shareholders.

On current trading, Mr Pedder said the new year had started with sales up by 2.1 per cent on the same period in 1995. But some factories are short of work, which could mean penalties for producing below capacity.