Landlords criticise Clarks CVA

Landlords have reportedly accused Clarks of abusing insolvency processes after it launched a company voluntary arrangement (CVA) they say they have little chance of blocking.

The British footwear retailer launched its CVA last week which will result in the majority of its 320 UK stores moving to turnover-based rents, while 60 will move to nil rent.

According to The Sunday Timers, the company’s landlords will only hold 25 percent of the vote for the CVA, despite being the only creditors to have their debts - totaling 160 million pounds - compromised by the CVA.

“This abuse of CVAs forces property owners to absorb significant losses with little attempt to build a recovery strategy they can support as economic partners,” British Property Federation CEO Melanie Leech told The Sunday Times.

Last week, Hong Kong-based private equity firm LionRock Capital agreed to acquire a 100 million pound majority stake in Clarks provided the retailer gets the green light for its CVA from creditors.

Photo credit: Clarks, Facebook