Shareholders of shoe chain Clarks have approved a rescue deal from a Hong Kong-based private equity company.
LionRock Capital will invest £100 million in the 195-year-old retailer as part of a Company Voluntary Arrangement (CVA).
The CVA will mean that none of Clarks’ 320 stores will have to close, and no jobs will be lost.
“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.
“The deal is expected to be completed in the new year with the Clark family remaining invested in the business.”
The CVA was already approved by Clarks’ creditors last month. However, landlords’ associations came out against the result.
The CVA will mean that 60 of Clarks’ stores will pay no rent at all, while rent will be turnover-based at the remaining 260.
This means that the amount of rent due will be based on how much customers spend at each store.
Melanie Leech, the chief executive of the British Property Federation, last month said that Clarks had exploited a Government moratorium on evictions that was put in place through Covid-19.
She said: “The Clarks CVA exemplifies everything that is wrong with UK insolvency legislation.
“Far from being treated as valuable economic partners with an interest in the ongoing success of Clarks, individual property owners were not given any meaningful opportunity to engage, on behalf of the savers and pensioners they represent, 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.
“And, this decision has been voted through by parties that are largely unaffected by the CVA.”