Company News

UPDATE 1-Desert boot maker Clarks picks LionRock for exclusive talks -source

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LONDON, Oct 2 (Reuters) - British shoe retailer Clarks has picked Hong Kong-based investment firm LionRock Capital for exclusive talks to buy a controlling stake in the 195-year-old business, a source familiar with the matter told Reuters.

LionRock has reached the final stage of a sale process aimed at injecting much-needed cash into Clarks in return for a majority stake in the struggling Somerset-based firm, which is still about 84% owned by the Clark family.

Best known for its desert boots made of calf suede leather, Clarks was founded in 1825 by Quaker siblings Cyrus and James who moved from making rugs out of sheepskin to footwear by using the off cuts to produce slippers.

The deal under discussion is worth between 100 million and 150 million pounds ($129-$194 million) and will see the Clark family keep a minority stake, the source, speaking on condition of anonymity, added.

A spokesman for Clarks said that as part of the company’s long-term strategy its board of directors was reviewing options to best position the business for future long-term growth.

LionRock declined to comment.

Clarks, led by former Geox boss Giorgio Presca, announced 900 job cuts in May as part of its turnaround plan dubbed “Made to Last.”

The firm, which employs around 13,000 people globally, has been hit hard by the pandemic due to prolonged lockdowns.

The Clark family hired Rothschild this year to run an auction targeting investment firms in Asia and the United States, the source said.

Clarks posted revenues of 1.47 billion pounds last year, with a loss after tax of close to 83 million pounds.

The business relocated the bulk of its production to Asia in 2005 and shut its last remaining British plant in 2006. ($1 = 0.7733 pounds) (Reporting by Pamela Barbaglia Editing by Rachel Armstrong and Alexander Smith)