By James Davey
LONDON (Reuters) - Clarks, the British shoemaker and retailer, will return to large-scale manufacturing in the UK for the first time in over a decade when a new factory in southwest England joins plants in Vietnam and India in making its iconic Desert Boot.
The 193-year-old firm, which operates in over 90 markets, said the new plant next to its headquarters in Street, Somerset, will have the capacity to make up to 300,000 pairs of Desert Boots a year and will give it shorter lead times.
Clarks' last plant in the UK, in northwest England, closed in 2006 after production was moved to the Far East.
The reopening of UK manufacturing is significant as it reflects renewed demand for 'made in Britain' footwear internationally.
The UK plant will join Clarks' existing suppliers and enable a faster response to changing consumer trends.
"The opportunity for this is we can put a manufacturing facility close to the market where we sell," said Clarks Chief Executive Mike Shearwood. He said production would start within weeks.
The decline of Britain's shoe industry started in the 1960s and accelerated rapidly in the 1980s and 1990s, driven by the import of cheaper products from low-wage economies and the advent of the trainer as a fashion item.
While annual production in the UK was around 180 million pairs in the mid-1980s and currently stands at about 6.5 million pairs it has grown by about 30 percent since 2008, according to figures provided by the British Footwear Association. It said about 30 factories still make shoes in the UK, exporting about 60 percent of their production.
Shearwood, the former boss of fashion retailer Karen Millen who joined Clarks as CEO in 2016, said the 3 million pounds ($4 million) new Street plant will combine robot-assisted technology and skilled labour. Some 80 jobs have been created.
"We've looked at the automotive and aerospace industries and utilised some of that technology to significantly change the way we make shoes," Shearwood told Reuters.
He said if the Street pilot proves successful, other new manufacturing units could be opened around the world.
Shearwood is pushing through a new strategy for the family-owned Clarks focused on improving average selling prices and building digital capability.
Clarks' accounts for 2017-18 showed underlying operating profit fell 29 percent to 45.2 million pounds, on turnover down 7 percent to 1.54 billion pounds.
It sold 47.6 million pairs of shoes from 1,514 shops.
"The retail environment remains challenging for all organisations, with increasing cost pressures and ever-changing consumer expectations," it said.
($1 = 0.7447 pounds)
(Reporting by James Davey; Editing by Alexandra Hudson)
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Updated Date: May 23, 2018 05:05:06 IST