- The U.K.-based shoe brand and retailer Clarks has sold a majority stake in the company to Hong Kong-based private equity firm LionRock Capital.
- The investment amounted to 100 million pounds (approximately $131 million at press time), according to a press release from LionRock. It ends an era of family ownership in the 195-year-old brand, though the Clark family remains "a key shareholder" in the business. The deal is still subject to shareholder and regulatory approval.
- LionRock said the investment will allow Clarks, which has a large U.S. footprint, to execute on a previously announced strategic plan. The parties also said it would also allow Clarks to expand globally, including in China and other Asia Pacific countries.
This spring, Clarks signaled a restructuring of its business that entailed up to 900 job cuts over 18 months as it looked to refocus on digital and social channels. It also announced then that it was reviewing its funding operations with advisers after closing its stores amid the COVID-19 pandemic, according to news reports from the time.
According to the Boston Globe, Clarks Americas President Gary Champion said in September that a quarter of Clarks' 214 U.S. stores could close within the next year. Gavin Maher, a partner with Deloitte, which has been advising Clarks, said in the press release that no stores would close immediately and suppliers continue to be paid.
LionRock's investment offers a way to stabilize the business amid unprecedented disruption caused by the pandemic. "Like many businesses in our sector, the impact of the Covid-19 pandemic and the current economic uncertainty has created a tough retail environment," Clarks Interim CFO Philip de Klerk said in a statement, adding that LionRock's investment "will provide funding for the company's seasonal working capital needs and its transformation strategy."
CEO Giorgio Presca said that the "challenges to our business brought on by Covid-19 have meant that we need more resources and investment in order to fully deliver this strategy and safeguard the future of our business." Along with cash and financial resources, Presca said LionRock brought expertise to help it grow in China, "which remains a primary opportunity."
How the acquisition plays out will likely depend on LionRock's stewardship and how the brand navigates the uncertain period ahead. Daniel Tseung, founder and managing director of LionRock, said of the deal, "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."