One of the U.K.’s most iconic footwear retailers looks like it may soon be under new management, writes Glenn Taylor of Sourcing Journal.
If a deal is approved, Clarks is set to have new majority ownership in the form of a China-based sports event production and management company, Viva China Holdings Limited. As part of the transaction, Viva China would not directly acquire Clarks—rather it is paying 51 million pounds ($69.7 million) for 51 per cent of LionRock Capital Partners QiLe Limited, the private equity firm which has scooped up the British brand.
No definitive agreement between Viva China and LionRock has been reached.
In December, Clarks’ shareholders voted to allow the struggling footwear retailer, manufacturer and wholesaler to be taken over by LionRock Capital, a move that ensured that all 320 of its remaining stores would survive. Under a company voluntary arrangement (CVA) approved by Clarks’ creditors, 60 of its stores will pay no rent, while rent will be sales-based at the remaining 260.
LionRock is presently in the process of completing its 100-million-pound ($129.9 million at the time of the acquisition) investment to recapitalize Clarks as part of its rescue of the ailing brand. Clarks said that the cash infusion would position the business for future long-term sustainable growth.
The private equity fund typically partners with leading global consumer brands with an emphasis on China expansion, so it appears the next step of Clarks’ growth could be taking place in that region. Clarks CEO Giorgio Presca floated that sentiment late last year.
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