The British footwear company Clarks was loss-making before the pandemic broke out last year, according to documents filed with the British registrar of companies, Companies House.

In the full year ended Feb. 1, 2020, Clarks posted an 8 percent decline in sales to £725.3 million (€827.9m-$1.0bn) as it sold fewer shoes due to continued difficult conditions in retailing in the U.K. and Northern Ireland. The two countries represented £513.8 million (€586.5m-$711.4m) in revenues in the full year.

As in the previous financial year, the company maintained its policy of reducing discounting which enabled to improve margin rates. Results were further underpinned by “strong cost control.” The operating loss was cut to £14.1 million (€16.1m-$19.5m) from £48.7 million (€55.6m-$67.4m) while the net loss slipped to £15.0 million (€17.1m-$20.8m) from £20.9 million (€23.9m-$28.9m). The bottom line was weighed down by an £18.2 million (€20.8m-$25.2m) impairment to investments.

The company, which is registered as C.&J. Clark International, said that the Covid-19 pandemic had a “deep and immediate” impact on its performance. It added that Brexit will also have an impact “on profitability and cashflow over the foreseeable future and brings risk and uncertainty in a number of areas.”

Clarks also filed the agreement with its creditors, known as a company voluntary arrangement (CVA). It details the list of creditors represented and how they voted. The company’s creditors include Calçado Samba, Calzaturificio Carmens, Farida Classic Shoes, Good Leather Shoes, Great One, Hong Kong Shoe Majesty Trading Company, Joao da Cunha e Silva & Filhos, PA Footwear, Shoe Premier International and Stella International.

The CVA opened the way to Clarks’ takeover by the Hong Kong private equity firm, LionRock Capital, in return for a £100 million (€112m-$132m) cash injection.