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Clarks begins landlord talks over restructuring deal

Clarks has reportedly “kicked off” restructuring talks with landlords regarding store closures and rent cuts, according to Sky News.

The footwear retailer and its advisers are said to be meeting with landlords this week to discuss a restructuring that would see the chain switch to a turnover-based rent model for future rent payments.

The proposed deal could result in the launch of a CVA, which could reportedly involve the permanent closure of roughly 50 UK shops, triggering “hundreds” of job losses.

Reports that Clarks could resort to a CVA in a bid to secure a rescue deal first emerged earlier this month.

At the time, Sky News reported that a potential rescue deal from LionCapital, a Hong Kong-based private equity firm, would be contingent on a CVA proposal being approved by its creditors. Clarks had previously ruled out that such a proposal was in consideration.

If the CVA is now approved, it is thought it will “pave the way” for Clarks to receive a cash injection of more than £100m from LionRock Capital.

If successful, the Clarks family would reportedly “relinquish” its majority ownership of the company.

Clarks currently operates 345 stores in the UK, employing thousands of people, many of whom Sky revealed were furloughed under the government’s Coronavirus Job Retention Scheme.

A CVA spokesperson told Sky: “We recently announced Clarks’ long-term ‘Made to Last’ strategy that is designed to ensure that our business has a sustainable and successful future, keeping it in step with changes in how consumers around the world choose and buy their shoes.

“As part of this strategy the Clarks board of directors is currently reviewing options to best position our business, our people and the Clarks brand for future long-term growth.”

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