Clarks enters talks with landlords over plan to shut 50 stores putting hundreds of jobs at risk as part of new reduced rent deal based on turnover at each branch
- Clarks could shut 50 of its 345 stores as footwear retailer battles to survive
- Footwear retailer in talks with landlords about shop closures and rent cuts
- It is discussing possible restructuring that would see it pay a ‘turnover rent’
- Hundreds of jobs are said to be at risk amid company voluntary arrangement
It has a proud 195-history having been a Quaker enterprise that grew from humble beginnings to become the world’s best-known shoe brand.
But Clarks is now yet another high street chain being hammered by the coronavirus crisis, with fears around 50 of its 345 stores could be shut as it battles to survive.
The footwear retailer based in Street, Somerset, has begun talks with landlords about shop closures and rent reductions with hundreds of jobs said to be at risk.
A man walks past a Clarks shoe shop in West London (file picture)
Bosses for Clarks and their advisers are meeting with landlords this week to discuss a possible restructuring that would see it pay a ‘turnover rent’, reported Sky News.
The deal would be a company voluntary arrangement or CVA, which is a form of insolvency mechanism used by retailers and casual dining businesses.
If the move is approved by creditors it would mean Clark can receive more than £100million cash from Hong Kong-based private equity firm LionRock Capital.
That would see the Clark family lose majority ownership of the company for the first time since it was founded by Cyrus and James Clark in 1825.
A Clarks spokesman 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.
Clarks grew from humble beginnings to become the world’s best-known shoe brand
‘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, the company announced 160 redundancies globally, including 108 job losses at its headquarters in Street, Somerset.
The retailer said it expected that roughly 700 employees will leave the business over the 18 months up to winter 2021, after creating 200 new roles.
The company said 170 employees left the business last year as it started its turnaround strategy.
It also said that the business would focus on three specific parts of its brand portfolio – Clarks Originals, Clarks Collection and Cloudsteppers by Clarks.