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LionRock Capital tries on majority stake in Clarks
Posted on Thursday, 05 November 2020 12:35
LionRock Capital has agreed to acquire majority stake in struggling UK-based shoe retailer Clarks in a deal that could be worth around GBP 100.00 million.
The partnership will secure a sustainable future for the 195-year old world-renowned brand with the Clark family to remain invested in the business.
Completion is conditional on shareholder approval and on a company voluntary arrangement for Clark’s UK and Republic of Ireland business in relation to its store portfolio.
The target is also hoping to benefit from the expertise that LionRock Capital brings to grow the brand globally, most notably in China and across the rest of Asia Pacific.
Philip de Klerk, interim chief financial officer at Clarks, said: In order to address the permanent shift in structural shopping behaviour as a result of the Covid-19 pandemic, the CVA [company voluntary arrangement] is being launched out of absolute necessity.
“The proposal to creditors outlines a combination of a reduction of rent and a move to rebase Clarks’ rental cost base through a turnover- based model that aligns to future performance and reflects the wider retail market.”
In the group’s latest statement on Companies House, the business posted turnover of GBP 1.47 billion in the year ended 29th February 2019, down from GBP 1.54 billion in the corresponding period of 2018.
Operating loss totalled GBP 75.70 million in fiscal 2019, compared to an operating profit of GBP 29.30 million in 2018.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 29 deals targeting clothing and clothing accessories store retailers announced worldwide in 2020 to date.
In the largest of these, BooHoo acquired the remaining 34.0 per cent stake in Prettylittlething.com in a deal worth GBP 323.80 million.
Other targets included ASOS, FarFetch, BooHoo and Go Outdoors Topco.
© Zephus Ltd