Clarks begins restructuring talks with landlords
Clarks is reported to have begun restructuring talks with landlords to negotiate some store closures and a shift to turnover-based rents.
The restructuring (which would take the form of a CVA) of the historic British footwear business would need to be approved by its creditors. If successful it would lead to a cash injection of more than £100m from Hong Kong-based private equity firm Lionrock Capital.
According to Sky News, the restructuring would lead to Clarks closing around 50 stores of its nearly 350 stores, and would result in hundreds of redundancies.
Lionrock's commitment to inject the cash is said to be contingent upon the success of the CVA. Its investment would lead to the Clark family relinquishing its its majority shareholding for the first time since the business was founded in 1825.
In May of this year, Clarks revealed that it was considering the potential sale of a stake worth £100m to £150m forming part of the plans.
In the same month CEO Giorgio Presca announced a company restructuring, called "Made to Last" that would lead to 900 jobs being cut from its global workforce, though some 200 new roles would partly offset the losses. A total of 160 job losses were announced immediately.
As part of the “Made to Last” strategy Presca also announced Presca the company would be focusing on three main areas of the business moving forward: Clarks Originals, Clarks Collection and Cloudsteppers by Clarks.
Clarks has consistently declined to respond to speculation about its plans and recently issued a statement to say: “We recently announced Clarks’ long-term ‘Made to Last’ strategy that is designed to ensure that our business has a sustainable and successful future, keeping it in step with changes in how consumers around the world choose and buy their shoes.
“As part of this strategy, the Clarks board of directors is currently reviewing options to best position our business, our people and the Clarks brand for future long-term growth.”