Amazon lost money despite selling 9 billion last year, and laid off employees twice in half a year

At the end of 2023, Clarks , a well-known British shoe brand and a big seller on Amazon, announced that it would lay off 103 employees . At that time , Clarks said that it had to make this decision due to the severe economic situation and serious cost crisis. After the past six months, news broke recently that Clarks will lay off employees again .

It is reported that as losses further widen due to weak consumer demand and rising costs, Clarks' layoffs may expand to 150 positions, covering offices around the world, including its UK headquarters in Somerset and its US headquarters in Massachusetts.

Let me first introduce Clarks. Clarks was founded by brothers Cyrus Clark and James Clark in 1825. As a synonym for Europe's top leather shoes, its categories cover men, women, old and young, and its retail and wholesale businesses cover more than 47 countries and regions around the world. According to online information, Clarks was once known as the "world's number one non-sports shoe brand" and was loved by stars such as the Beatles. In 2022, it was acquired by Li Ning's largest shareholder, Feifan China, which means that Clarks has Chinese capital background.

( Screenshot from Clarks official website)

As an internationally renowned brand, it is inevitable to carry out multi-platform and multi-channel layout. Therefore, online alone, Clarks has independent websites, Amazon, Walmart and other channels.

When you type "Clarks" on Amazon (US) , the first thing that comes into view is a pair of women's shoes called "Womens Breeze Sea", which is priced at less than $32 after discount. Over 800 pairs have been sold in the past month, with a rating of four and a half stars and over 87,000 reviews. There are also many other Clarks listings with ratings between four and four and a half stars and over 10,000 reviews, which shows how much sales they have on Amazon.

(Screenshot of Clarks products on Amazon US )

Even so, it did not save Clarks from falling profits. According to foreign media reports, Clarks' turnover increased by 1.4% last year to 994.5 million pounds (about 9.1 billion yuan), but its after-tax loss reached 32.1 billion pounds (about 295 million yuan), and its profit fell by 243.3% year-on-year .

Clarks put the result down to several factors, including weaker demand in the full-price channel, underperforming Western outlets, reduced wholesale demand and "discount-hungry consumers".

Of course, Clarks did not sit still. TikTok, which has a young user base of 69.3% (18-34 years old) and 1.56 billion monthly active users worldwide, is a platform that they have put a lot of effort into. Last year, Clarks collaborated with TikTok influencers with the hashtag #TorhillDance, inviting these TikTok stars to shoot videos wearing their favorite Torhill.

Clarks also has its own account on TikTok, with 2.9 million followers and 10.7 million likes on its videos. The introduction is very simple: Since 1825, but the content of the videos is youthful and has won the hearts of fans. The number of views of individual videos under the account is basically over 100,000, with several even exceeding 2 million and one reaching 5 million. Under the #clarks topic, the number of related videos has also reached 197,000. It can be seen that although the brand history is close to 200 years, Clarks still has a young market.

( Screenshot from Clarks TikTok account)

In my opinion, if Clarks can seize the development of channels such as TikTok and Amazon, it may not be impossible to win this headwind. A recent study released by Goldman Sachs mentioned that global e-commerce sales are expected to increase to US$3.9 trillion in 2024, with an average annual compound growth rate of 7% from 2023 to 2028, reaching US$5.0 trillion by 2028. The potential of e-commerce channels is self-evident.

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