Clarks kicks off restructuring talks with landlords
High street footwear retailer Clarks has begun negotiations with landlords over store closures and rental agreements as it prepares to launch a restructuring plan.
Clarks and its advisors will meet with retail property owners this week to discuss a company voluntary arrangement, which would allow the retailer to move to a “turnover rent” model linked to sales, Sky News reported.
The restructuring, which would need to be approved by creditors, would see Clarks close 50 stores, resulting in hundreds of redundancies in a further blow to the ailing UK high street.
If the plans are approved, Clarks would receive a cash injection of more than £100m from Hong Kong private equity firm Lionrock Capital.
However it would also see the founding Clark family let go of majority ownership of the firm for the first time since it was established in 1825.
“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,” a spokesperson for the firm said today.
“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.”
In May, Clarks announced that it was preparing to slash 900 corporate roles and confirmed it was in talks with advisers over funding options during the coronavirus crisis.
The retailer said it will reduce its global workforce by 900 roles, which would be partially offset by the creation of 200 new jobs.
The company announced 160 redundancies in the spring, including 108 at its Somerset headquarters.
Around 700 workers were expected to leave the company over the following 18 months, Clarks said in May.
It also said it was “reviewing funding options with selected advisers” to address the short-term liquidity needs caused by the coronavirus crisis.
The announcement came after 170 jobs were cut last year as part of Clarks’ “made to last” turnaround strategy.
At the time the company said it would “review its stores in line with changing consumer needs”.