Clarks eyes store closures under new ownership

Clarks is reportedly eyeing closures across its 320-strong store estate under its new ownership.

The company’s executive chairman and CEO Victor Herrero has been tasked with creating a plan to steer the British footwear retailer out of the pandemic, which will likely begin with store closures, The Telegraph reports.

But he said he would try to save “as many as possible”, according to the newspaper.

Herrero, who was formerly the CEO of Guess, was appointed to the helm of the company in February following the exit of former chief Giorgio Presca, along with chief commercial officer Massimo Barzaghi and chief people officer Difna Blamey.

Hong Kong-based private equity firm LionRock Capital acquired a 100 million pound majority stake in Clarks late last year. It came as the 195-year-old British footwear retailer received the green light from its creditors to launch a company voluntary arrangement (CVA) which will see its stores switch to turnover-based rents.

“We’re in the final stages of wrapping all the UK store restructuring that needs to take place,” Lionrock founder Daniel Tseung said, according to The Telegraph.

But he was tight-lipped about how many jobs cuts there might be across Clarks’ 12,000-strong workforce.

In February, Clarks reported an 8 percent drop in pre-Covid sales to 725.3 million pounds for the year ended February 2020.

The company said the fall reflected “continued difficult conditions in the UK and ROI retail channel as footfall declines continued”.

Its operating loss was 14.1 million pounds, down from a loss of 48.7 million pounds the year before, while its loss after tax was 15 million pounds, compared to a loss of 20.9 million pounds a year earlier.

Image: Clarks, Facebook