Tue, 07 Apr 2020 | COMMERCIAL PROPERTY
Footwear retailer Clarks has confirmed that it will close a small number of stores and has reportedly engaged investment bank Rothschild to explore potential financing facilities.
The permanent closures have been selected from stores with leases expiring in May and are said to not be linked to the coronavirus lockdown. Clarks has 347 stores across its UK portfolio, a “small number” of which will not reopen once the enforced closure of non-essential businesses ends.
The company has furloughed thousands of staff under the UK government’s Coronavirus Job Retention Scheme and is said to have appointed Rothschild to manage its financing options and access new borrowing facilities.
It has also been working on a new corporate blueprint with management consultant McKinsey and part of this has seen it review all stores, leading to the decision not to renew leases on some.
A spokesperson for the company 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.”
In its latest set of earnings, to the year ended February 2 2019, Clarks recorded turnover of £790 million, down from £820.4 million the year before, while it saw its operating loss increase from £3.7 million in 2017/2018 to £48.7 million. Its gross profits were £339 million, down from £366.9 million.
At the time, Clarks registered fixed assets worth £168.7 million and total current assets of £510.2 million, with net assets less current liabilities of £153.3 million.
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