Clarks lose control of the family shoe chain as pandemic rips through Britain’s high streets
The founding family of Clarks shoes will lose majority ownership of the company for the first time as the pandemic rips through Britain’s high streets.
Cyrus and James Clark, who came from a Quaker farming family, started the company in Somerset in 1825 when they used offcuts from their sheepskin rug firm to make slippers.
Clarks grew to become one of Britain’s great retailers, best-known for supplying school shoes.
Clarks, which started in Somerset in 1825, grew to become one of Britain’s great retailers, best-known for supplying school shoes
But yesterday the family had to sell much of its 84.8 per cent stake to private equity firm Lion Rock.
The Hong Kong firm will inject £100million to keep its 320 stores afloat. The sale is reliant on landlords voting for swingeing rent cuts next month as part of a company voluntary agreement (CVA).
At the same time all 4,000 shop staff roles up are for consultation, with 900 jobs lost earlier in the year.
Losses widened to £82.9million in the year to February 2019, up from a £31million loss in 2018.
Sales slid 6 per cent to £1.4billion as Clarks sold 20m pairs of shoes, 2m fewer than the year before.
It has struggled as shoppers moved online and from rising costs from rents, rates and the minimum wage.
The sale to Lion Rock will go ahead if, next month, creditors vote for harsh CVA proposals including moving 60 stores to zero rent. The remaining 260 would shift to turnover-based rents.
Irene Pedder, chairman of the Clark Family Shareholder Council, said: ‘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.’