The Asian private equity firm LionRock Capital has reached an agreement to rescue the iconic British shoe brand Clarks in a £100 million (€110.9m, $130.0m) deal that will see the founding family keep a stake in the business.

The deal, which requires approval of a Company Voluntary Arrangement (CVA), will allow the 195-year-old firm to expand into China and the Asia-Pacific region. Clarks insists that no jobs will be lost with the agreement, while also pledging that staff and suppliers will still be paid. No details were given on the proposed share ownership structure.

Under the CVA, 60 of the chain’s 320 stores will not pay rent. For the remaining locations, the proposal to creditors is a combination of rent cuts and rebasing Clarks’ rental cost base through a turnover-based model that aligns to future performance and reflects the wider retail market.

”It is important to stress that we are not announcing the closure of any stores today, and employees and suppliers will continue to be paid,” said the interim chief financial officer, Philip de Klerk.

He added that the CVA was being launched “out of absolute necessity” to keep pace with “the permanent shift in structural shopping behaviour as a result of the Covid-19 pandemic.”

Shareholders will be asked to vote on the proposed transaction in December.

Irene Pedder, chair of the Clark family shareholder council, said: “We remain invested in Clarks’ long-term growth and will remain committed shareholders to help steward this iconic company into its third century, while protecting the strong values and brand heritage Clarks is known for.”

Chief executive Giorgio Presca earlier this year unveiled a ”Made to Last” strategy which involves 900 job cuts. The company reported a post-tax loss of £83 million (€92.1m, $107.9m) in the year to Feb. 2, 2019.

At the time the company reported “significant footfall declines resulting in material shortfalls in retail channel performance in both the U.S. and U.K.” The tough retail environment has been exacerbated by the first Covid-19 lockdown with its stores shuttered and staff placed on furlough.

Presca said the deal with LionRock will provide the expertise to grow the brand in China, “which remains a primary opportunity.”

Gavin Maher at Deloitte, which is running the CVA process, said Clarks had already been struggling under the burden of weaker consumer confidence and reduced footfall.

“In the midst of Clarks undertaking its transformation plan, Covid-19 exacerbated these challenges, with working capital and turnover significantly impacted, placing acute liquidity pressure on the group,” he said.

“The turnover rent model better aligns the risk and reward of trading during these uncertain times and the CVA, together with the proposed investment from LionRock, provides a stable platform upon which the management’s transformation strategy can be delivered.”