Clarks Limited the 195-year-old world-renowned British shoe brand, has reached agreement for LionRock Capital, an Asian private equity firm, to acquire a majority stake in Clarks, with the Clark family to remain invested in the business.
The £100 million investment is intended to allow Clarks to position the business for future long-term growth and deliver its strategy to revitalise the iconic footwear brand as it enters its third
The LionRock Capital investment in Clarks will be subject to shareholder approval, and shareholders will be asked to vote on the proposed transaction in December. The investment is also subject to a CVA for its UK and Republic of Ireland businesses in relation to its store portfolio.
Commenting on today’s announcement, Clarks Chief Executive Officer Giorgio Presca said: For nearly 200 years, Clarks has been a pioneer of shoemaking, inventing the casual shoe and delivering innovative and iconic shoes consumers love and trust. Underpinned by a rich heritage and strong values, today we are a leading global footwear brand serving millions of consumers across the world. Our new strategy, in conjunction with our new partnership with LionRock Capital will create a strong and sustainable future for this unique and iconic brand.
Daniel Tseung, Founder and Managing Director of LionRock Capital added: “Clarks is one of the world’s most recognized consumer names and we look forward to working with the Clark family in extending its tradition of providing customers with top quality products and exceptional service.
“We are extremely pleased to have the opportunity to partner with Clarks in expanding the company’s global operations and worldwide customer footprint. Our investment will not only strengthen Clarks’ position as one of the world’s most recognized brands, but also allow growth into key emerging markets.
“We believe our investment would create a stable platform for the Company from which to manage through the unprecedented crisis, holistically restructure and transform the business and further expedite the brand’s growth globally going forward.”
Clarks’ Non-Executive Chair, Stella David said: “The ongoing Covid-19 crisis that has engulfed the world this year has affected Clarks in common with many other brands. We owe it to our consumers, our employees, all our partners and everyone that loves the Clarks brand to ensure that this company is protected and that its future is secured.
“We are entering a new era for Clarks and we are delighted to be welcoming LionRock Capital as our partners as they share our long-term vision for a successful and sustainable future for Clarks and the strategy for growth on a global scale.”
Chair of the Clark Family Shareholder Council, Irene Pedder also commented: “For nearly two hundred years, Clarks has pioneered a culture of innovation and craftsmanship, growing to become one of the world’s most loved and respected footwear brands. The impact of the ongoing Covid-19 crisis has resulted in necessary steps being taken to safeguard the future of the Clarks brand, business and its people. 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.”
Gavin Maher, Partner, Deloitte, concluded: “The retail trading environment in the UK has been under pressure for some time. The Clarks UK business has been faced with 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. 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.”
