British retailer Clarks plans to hold talks with its landlords to discuss the retailer’s proposed company voluntary arrangement (CVA) that includes moving to a turnover-based rent model. The plan also includes closing around 50 of its 347 UK stores and rent cuts for many of the surviving sites.
The agreement is conditional on Clarks receiving a cash injection of more than £100m from Hong Kong-based private equity firm LionRock Capital. However, the founding Clarks family would have to give up majority ownership for the first time in its near-200-year history.
The meeting with landlords aims to discuss the issues of rent reductions and stores closures. Clarks’ pension trustees are also expected to play a significant role in any CVA vote. The proposed CVA comes after the pandemic has devastated UK high street sales, hitting the footwear sector hard. The need to buy or replace footwear for work or social events has diminished since lockdowns began in the spring and has re-emerged in the face of localized lockdowns.
