Shareholders of the British shoe maker Clarks have approved the £100 million (€110m - $134m) rescue deal with the Hong Kong-based private equity firm LionRock Capital.
The iconic 195-year-old retailer was forced to seek financial help under a company voluntary arrangement (CVA) amid plunging sales in a weak trading environment compounded by the Covid-19 pandemic that saw all of its stores shuttered during the lockdown.
Under the CVA, none of Clarks’ 320 stores will have to close, and no jobs will be lost, but landlords of 60 outlets will receive no rent at all, while the remaining 260 will move to a turnover-based arrangement.
“The shareholder approval will enable Clarks to form a partnership with LionRock Capital, a seasoned Asian private equity firm, who will acquire a majority stake in the business for an investment of £100 million,” Clarks said in a statement.
“The deal is expected to be completed in the new year with the Clark family remaining invested in the business.”
Creditors gave the CVA a green light last month, much to the fury of landlords’ associations who accused the company of “abusing” the process.
British Property Federation chief Melanie Leech said Clarks had exploited a government moratorium on evictions that was put in place due to the Covid-19 pandemic.
Leech last month said individual property owners were not given any meaningful opportunity to engage with the company before the CVA was launched “and yet they are the only class of creditor being asked to permanently and irrevocably write down what they are owed”.
“This decision has been voted through by parties that are largely unaffected by the CVA,” she added.