Landlords of historic British footwear brand Clarks have approved a plan to allow the business to pay zero rent on a number of its stores, as part of a rescue of the 195-year-old company.
Clarks has confirmed that that 90% of its creditors, which include landlords, have voted for its proposed company voluntary arrangement (CVA).
It clears a major hurdle for Clarks, which is now set to receive an injection private equity cash from Hong Kong-based LionRock Capital.
“I am very pleased that the CVA was approved today. This is a significant step towards the formation of our new partnership with LionRock Capital,” said Philip de Klerk, Clarks’ interim chief executive.
The deal still needs approval from shareholders before LionRock can take a majority stake in the business. The deal means that the Clark family will not longer have overall control of the business.
Deloitte partner Gavin Maher, who has worked on the CVA, said: “The approval of the CVA is an important milestone for Clarks, enabling the business to move forward.
“The CVA, together with the proposed investment from LionRock, will provide a stable platform upon which the management’s transformation strategy can be delivered.”
Earlier this month, Clarks said that the CVA would allow it to continue paying staff, and that no jobs would be lost. All 320 stores will remain open, but rent will be slashed to zero on 60 of them. The rest of the stores will switch to turnover-based rents.
There remains a 28-day period during which Clarks’ CVA can be challenged.