Clarks Partners with LionRock Capital in £100 Million Deal

C&J Clark Limited (Clarks), the 195-year-old British shoe brand, announced its agreement to form a partnership with LionRock Capital, an Asian private equity firm. The £100 million investment by LionRock Capital will acquire a majority stake in Clarks, with the Clark family to remain invested in the business. The deal will enable Clarks to position the business for long-term, sustainable growth and deliver its strategy to revitalize the brand as it enters its third century in line with its Made to Last strategy announced in May 2020. The partnership will also enable Clarks to benefit from the expertise that LionRock Capital brings to grow the brand globally and most notably in China and across the rest of the Asia-Pacific region.

“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,” states Giorgio Presca, CEO of Clarks, noting the strategy puts the consumer at the heart of everything through brand segmentation and revitalizing brand communications, digital experience and product design to create consumer desire. “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. The new partnership with LionRock Capital will provide this. Our people, partners and customers remain our top priority and we are committed to building a relevant, accessible and desirable brand that reflects the way consumers live their lives.”

“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,” says Daniel Tseung, founder and managing director of LionRock Capital. “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.”

The LionRock Capital investment 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. The deal will move 60 of Clarks’ 320 stores to zero rent, but doesn’t involve store closures as of yet. “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,” states Gavin Maher, partner of Deloitte. “It is important to stress that no stores will close immediately, and employees and suppliers will continue to be paid.”

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