// Clarks asks landlords for rent reductions
// Footwear retailer is asking for rent cuts of up to 30% and is offering to extend leases in some stores in return
// Clarks insists it is too profitable to be a candidate for a CVA
Clarks has reportedly asked for discounts on rent from landlords after a period of weak trading.
According to The Sunday Times, the footwear retailer is asking for rent discounts of up to 30 per cent.
In return, it is offering to extend leases in some stores.
It comes amid a spell of dwindling sales for the family-owned retail chain.
According to its most recent full year report for the period ending February 3, 2018, operating profit plunged by 29 per cent to £29.3 million while pre-tax profits came in at just £19.7 million.
Full-year sales also dipped to £1.54 billion.
Despite the poor financial performance, a source speaking to The Times said Clarks was too profitable to be a candidate for a CVA.
A Clarks spokesperson said: “Since early 2017, when Clarks announced that it would be conducting a full review and modernisation of the company’s property portfolio, we have been constantly reviewing our store estate to ensure that all stores are the right size and located in the right places to enable us to provide the right offering for customers.
“As a key brand on many of the UK’s high streets, we are committed to retaining our presence and ensuring our stores continue to play a critical role in delivering a great experience for our customers.”
Clarks joins the likes of River Island, Jack Wills and Primark in seeking better rental terms with landlords while other struggling retailers use CVAs to close stores and slash rents.
Meanwhile, rival footwear retailers Office and Schuh have appointed restructuring advisors to asses their businesses and options.
Clarks’ current chief executive Giorgio Presca was appointed to the role in March, the same month the company was forced to close its last remaining UK factory in Somerset with the loss of 35 jobs.