Clarks may turn to CVA to secure LionRock rescue deal

Embattled shoe retailer Clarks may reportedly resort to launching a CVA that could lead to some store closure in order to secure a rescue deal from potential investors LionRock Capital.

According to Sky News, any rescue deal from LionCapital is reportedly contingent on a CVA proposal being approved by its creditors. Clarks has previously ruled out that such a proposal was in consideration.

Sources cited by the news outlet said that the proposal could see as many as 50 stores closed and the remainder switched to a turnover-based rent model.

Last month it was initially reported that the Hong Kong-based private equity firm, which backs a number of companies such as Taxi hailing app Hailo and Serie A football giant Internazionale, had reportedly entered the race to acquire Clarks.

It is thought that any deal will likely see the Clark family retaining a stake in the business, although this could potentially be below 50% depending on how talks progress.

The news also comes after Clarks announced the launch of its long-term ‘made to last’ strategy that is designed to ensure that Clarks has a “sustainable and successful future” back in May.

The move, which aims to make the business more sustainable, resulted in around 900 members of staff being made redundant.

A Clarks spokesperson said: “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.”