The last few steps taken by Clarks seem to confirm the theory that the founding family has the intention to give up control of the business. The historic British brand has allegedly begun negotiations with the owners of the sites in which the stores are located so as to re-negotiate rental agreements. This would allow them to have more chances of having their Company Voluntary Arrangement (CVA) with creditors approved, and open the way for new stockholders.
Clarks’ last few steps
Clarks would like to offer the owners of the sites, in which the stores are located, a new rental agreement that would base the amount due to the store’s revenue. If this model is agreed upon, it will become a part of the CVA proposed by the British brand. If 75% of creditors (including the landlords) agree, then the CVA would be signed. The agreement, according to Sky News, includes the possibility of closing at least 50 stores out of the total 345 controlled by Clarks in the UK.
The approval of the CVA could put Clarks in the position of accepting the advanced proposal made by PE fund LionRock Capital. The latter has promised the brand 100 million UK pounds if the CVA is approved.
195 years later
If everything will go according to plans, the Clarks family will, after 195 years, lose control of the brand it founded. What could change the situation are the “pension trustees”, as they are working to parallelly to ensure that Clarks, well known for its iconic Desert Boot, receives new investments.
Image from clarks.eu
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