Clarks family lose control of shoe chain in £ 100million rescue Business

The family that founded Clarks will lose control of the shoe retailer for the first time in its 195-year history following a £ 100million bailout deal.

Support from Hong Kong-based private equity giant LionRock Capital will force the chain to move forward with a voluntary corporate deal, a controversial form of insolvency.

Clarks said staff will continue to be paid during the process, which requires approval from homeowners and other creditors at a meeting next month.

However, separately, the chain told store employees that their roles risked being sacked as part of a sweeping plan to revive the struggling business, Retail Week first reported. Up to 4000 roles could be assigned.

A spokesperson said: “This announcement is not related to LionRock or the CVA proposal. It is part of the ongoing Clarks strategy announced in May.”

The bosses said the CVA should allow them to keep the 320 stores open and pay no rent at 60 sites. Other branches should pay rent based on turnover.

If the CVA is successful, LionRock will buy a controlling stake in Clarks, with the Clark family remaining an investor in the company.

Philip de Klerk, acting chief financial officer of Clarks, said the CVA was an “absolute necessity” to deal with the continuing change in buying behavior following the pandemic.

“The proposal to creditors describes a combination of a reduction in rent and a change in the basis of the rental costs of Clarks through a revenue-based model that aligns with future performance and reflects the market. broader retail, ”he said.

“As part of the CVA, we will be moving 60 of our 320 stores to zero rent. It is important to note that we are not announcing any store closures today and that employees and suppliers will continue to be paid. “

More about this article: Read More
This notice was published: 2020-11-04 15:38:41