Clarks survives! Shareholders agree to LionRock Capital takeover
Clarks’ shareholders have voted to allow the struggling UK footwear retailer to be taken over by private equity firm LionRock Capital.
The £100 million deal is the final part of a rescue packaged that hinged on the business securing a Company Voluntary Arrangement (CVA). That CVA was approved by the company’s creditors last month and will ensure all Clarks’ 320 stores will survive for now.
The rescue deal, which is expected to be completed in the new year, will see Hong-Kong based LionRock Capital take a controlling stake in the near-two-century family-owned business. The Clark family will remain invested in the business.
According to the LionRock, the agreement will enable Clarks to position the business for future long-term sustainable growth and deliver its strategy to revitalise the brand.
Although opposed by some landlords, the approved CVA will mean 60 of Clarks’ stores will pay no rent, while rent will be turnover-based at the remaining 260.
Clarks' survival will be seen as a rare retail positive after the pandemic has devastated UK high street sales this year, hitting the footwear sector particularly hard. Successive lockdowns and a rise in working from home meant buying footwear for work or social events fell dramatically.
Earlier in the year, Clarks announced plans to to cut around 900 corporate jobs worldwide with over 100 jobs going at the company’s HQ in Somerset, UK. The company noted, however, that around 200 new roles will be created.
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