Footwear specialist Clarks has launched a CVA in a bid to shutter stores and secure a much needed cash injection from outside investors.

Clarks has resorted to the insolvency measure because the proposed £100m rescue deal from Hong Kong-based private equity firm LionRock Capital is contingent on creditors approving the company voluntary arrangement (CVA), according to Sky News. 

If passed, the embattled retailer could close up to 50 poorly performing stores in the UK and axe hundreds of jobs, while moving the remainder of its estate on to turnover based rents in a similar deal to that secured by fashion brand New Look over the summer. 

Should the CVA pass and LionRock’s investment come through, Clarks would move out of private ownership for the first time in its 195-year history. 

The move comes after the retailer’s trustees drafted in advisers from Penfida and FRP Advisory to help with ongoing talks with LionRock. 

In May, chief executive Giorgio Presca unveiled the retailer’s “Made to Last” strategy. The 18-month strategy overhaul will result in 700 redundancies globally, as the retailer looks to future-proof the brand.

In April, three of the big four accountancy firms had been drafted in to work on a restructuring of Clarks as it attempted to weather the Covid-19 impact on business.

The retailer’s family shareholders drafted in KPMG to advise them, while Deloitte was hired by the management team.

Presca said at the time there were “exciting opportunities ahead” for Clarks.

While Clarks wouldn’t comment on the CVA, a spokeswoman said: “We recently announced Clarks’ long-term ‘Made to Last’ strategy that is designed to ensure that our business has a sustainable and successful future, keeping it in step with changes in how consumers around the world choose and buy their shoes.

“As part of this strategy, the Clarks board of directors is currently reviewing options to best position our business, our people and the Clarks brand for future long-term growth.”