Clarks, the 195 year-old shoe retailer, is in talks about a share sale that would dilute its family shareholders’ controlling stake in the company.
Sky News has learnt that the company has approached several private equity firms about a deal, which would involve raising between £100m and £200m from external investors.
Sources said the discussions were at a preliminary stage, with the exact sum to be raised and the combination of debt and equity some time from being finalised.
If successfully concluded, however, the talks are likely to lead to the Clark family’s 85% shareholding being reduced.
News of the discussions comes the day after the company unveiled a strategy – dubbed ‘Made to Last’ – that will aim to steer it into its third century of operation.
The plans will involve 900 job losses, with 200 new roles being created.
More than 100 redundancies at its Somerset head office were announced on Thursday.
The reorganisation of Clarks’ business is being led by Giorgio Presca, a former Levi Strauss & Co and Golden Goose executive who took over as chief executive earlier this year.
A source close to Clarks confirmed that the company was holding “very early-stage discussions about potential minority equity investors into the business”.
The source cautioned that this was only “one of a number of different options under consideration, and it is too early to say if this is an option that will be pursued”.
Last month, Sky News reported that three of the big four accountancy firms had been drafted in to work on a restructuring of Clarks as it tries to weather the coronavirus outbreak’s impact on the high street.
The chain’s family shareholders have drafted in KPMG to advise them, while Deloitte has been hired by the company’s management team.
PricewaterhouseCoopers had been engaged by a syndicate of the footwear chain’s lenders as they assess the COVID-19 crisis’s impact on its prospects.
The string of appointments come after a difficult period for Clarks, which was founded in 1825 and has become synonymous with generations of parents buying the first pairs of shoes for their children.
It remains largely owned by descendants of Cyrus and James Clark, who founded the business in Somerset nearly 200 years ago.
The involvement of Deloitte, KPMG and PwC signals that a more far-reaching restructuring is likely, including much larger numbers of store closures in some of the countries in which Clarks operates.
Clarks trades from about 345 stores in the UK, employing thousands of people, but has denied that it will be exploring a Company Voluntary Arrangement – a widely used insolvency mechanism that would – if approved by creditors – pave the way for a radical restructuring.
The company has furloughed thousands of its store staff under the government’s Coronavirus Job Retention Scheme, and has been assessing options for the remainder of its workforce.
In the last year for which figures are available, Clarks reported a post-tax loss of more than £80m.
A Clarks spokesman declined to comment.