UK (Sky News)

Coronavirus: Struggling Clarks plots permanent store closures

By April 8, 2020 No Comments

The family-owned footwear retailer Clarks has drawn up plans for the permanent closure of some of its stores and drafted in bankers to review its finances as the coronavirus crisis takes its toll.

Sky News has learnt that the company, which has been struggling to deliver a turnaround in its fortunes, has decided not to reopen “a small number” of its 347 UK stores once the enforced closure of non-food shops comes to an end.

Sources said that Clarks had in recent days appointed Rothschild, the investment bank, to help explore financing options for the business, including accessing new borrowing facilities.

The company has furloughed thousands of its store staff under the government’s Coronavirus Job Retention Scheme, and is assessing options for the remainder of its workforce.

Under new chief executive Giorgio Presca, Clarks has been working with the management consultant McKinsey on a new corporate blueprint.

However, the loss-making business is now focused on weathering the COVID-19 pandemic.

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A Clarks spokeswoman said: “Clarks continually reviews all its stores to ensure that they are the right size and located in the right areas in order to provide the best possible service and offering to its customers.

“As part of this normal review, we have decided not to renew the leases on a small number of stores and as such, these will cease to trade and will not reopen following the coronavirus closures.

“We have a strong duty of care to our employees and are doing everything we can to minimise the impact on colleagues.”

Retail sources expect the company to pursue a more formal restructuring deal such as a Company Voluntary Arrangement in the medium term, although the spokeswoman said there were no talks about widespread shop closures.

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