{"id":163286,"date":"2020-11-04T12:44:00","date_gmt":"2020-11-04T12:44:00","guid":{"rendered":"https:\/\/www.theindustry.fashion\/clarks-rescued-in-100m-deal-backed-by-lionrock\/"},"modified":"2021-08-06T12:08:53","modified_gmt":"2021-08-06T12:08:53","slug":"clarks-rescued-in-100m-deal-backed-by-lionrock","status":"publish","type":"post","link":"https:\/\/www.theindustry.fashion\/clarks-rescued-in-100m-deal-backed-by-lionrock\/","title":{"rendered":"Clarks rescued in \u00a3100m deal backed by LionRock"},"content":{"rendered":"<p>Clarks, one the UK\u2019s oldest shoe chains, has been<strong> rescued in a \u00a3100 million investment by Hong Kong-based private equity giant LionRock Capital.<\/strong><\/p>\n<p><!--more--><\/p>\n<p>The deal will see the 195-year-old retailer enter into Company Voluntary Arrangement (CVA), with Clarks insisting that <strong>no jobs will be lost and staff will continue to be paid.\u00a0<\/strong>Bosses said the move will <strong>allow them to keep all 320 stores open<\/strong> with no rent on 60 sites.<\/p>\n<p>The remaining outlets will be <strong>switched to a turnover-based model<\/strong>, but the process must be voted through by landlords at a meeting next month.<\/p>\n<p>Philip de Klerk, interim finance chief at Clarks, said: \u201cIn order to address the permanent shift in structural shopping behaviour as a result of the COVID-19 pandemic, <strong>the CVA is being launched out of absolute necessity.<\/strong><\/p>\n<p>\u201cThe proposal to creditors outlines a <strong>combination of a reduction of rent and a move to rebase Clarks\u2019 rental cost base<\/strong> through a turnover-based model that aligns to future performance and reflects the wider retail market.<\/p>\n<p>\u201cAs part of the CVA, <strong>we will move 60 of our 320 stores to nil rent.<\/strong> It is important to stress that we are not announcing the closure of any stores today, and employees and suppliers will continue to be paid.\u201d<\/p>\n<p>If successful in a vote next month, <strong>LionRock will buy a majority stake in Clarks,<\/strong> with the Clark family to remain invested in the business.<\/p>\n<p>Gavin Maher, a partner at Deloitte, which is running the CVA process, said: \u201cThe retail trading environment in the UK has been under pressure for some time.<\/p>\n<p>\u201cThe Clarks UK business has been <strong>faced with weaker consumer confidence and reduced footfall.<\/strong><\/p>\n<p>\u201cIn the midst of Clarks undertaking its transformation plan, <strong>COVID-19 exacerbated these challenges, with working capital and turnover significantly impacted,<\/strong> placing acute liquidity pressure on the group.<\/p>\n<p>\u201cThe turnover rent model better aligns the risk and reward of trading during these uncertain times, and the CVA, together with the proposed investment from LionRock, provides <strong>a stable platform upon which the management\u2019s transformation strategy can be delivered<\/strong>.\u201d<\/p>\n<p>The company is the latest in a long line of high street firms which have turned to insolvency specialists to avoid complete collapse.<\/p>\n<p>Retailers including<strong> New Look, Jigsaw and Edinburgh Woollen Mill have all used insolvency processes to reduce debts<\/strong> as struggling stores buckled under the pandemic pressures and restrictions on high streets.<\/p>\n<p>Daniel Tseung, founder and managing director of LionRock Capital, said: \u201cClarks is <strong>one of the world\u2019s most recognised consumer names<\/strong> and we look forward to working with the Clark family in extending its tradition of providing customers with top-quality products and exceptional service.\u201d<\/p>\n<p><a href=\"https:\/\/www.theindustry.fashion\/subscribe-now\/\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-144088 size-full\" src=\"https:\/\/www.theindustry.fashion\/wp-content\/uploads\/Daily-Newsletter-Banner.png\" alt=\"Newsletter banner\" width=\"1680\" height=\"268\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p> [&hellip;]<\/p>\n","protected":false},"author":68,"featured_media":140959,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[16042,10585,6,10494],"tags":[4659,9875,16243,11455],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Clarks rescued in \u00a3100m deal backed by LionRock - TheIndustry.fashion<\/title>\n<meta name=\"description\" content=\"Clarks, one the UK\u2019s oldest shoe chains, has been rescued in a \u00a3100 million investment by Hong Kong-based private equity giant LionRock Capital. 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