CLARKS Shoes, the 195-year-old British brand, is set to be rescued by a £100 million investment from a Hong-Kong based company.

LionRock Capital could require a majority stake in Clarks, with shareholders set to vote on the transaction in December.

The retailer will enter into a form of administration known as a Company Voluntary Agreement (CVA), but Clarks have insisted no jobs will be lost and staff will be paid.

Chief executive officer at Clarks, Giorgio Presca, said: “Our new strategy, in conjunction with our new partnership with LionRock Capital will create a strong and sustainable future for this unique and iconic brand.

“The challenges to our business brought on by Covid-19 have meant that we need more resources and investment to fully deliver this strategy and safeguard the future of our business.

“The new partnership with LionRock Capital will provide this as well as the expertise to grow the Clarks brand in China, which remains a primary opportunity.

“Our people, partners and customers remain our top priority and we are committed to building a relevant, accessible and desirable brand that reflects the way consumers live their lives.”

Bosses said the move will allow them to keep all 320 stores open with no rent on 60 sites.

The remaining outlets will be switched to a turnover-based model, where rent is calculated on the amount of cash that goes through the tills, but the process must be voted through by landlords at a meeting next month.

Philip de Klerk, interim chief financial officer at Clarks, added: “Like many businesses in our sector, the impact of the Covid-19 pandemic and the current economic uncertainty has created a tough retail environment.

“The investment from LionRock Capital and the restructuring of our retail footprint, combined with the on-going support from our existing lenders and our focus on cash management and cost control, will provide funding for the company’s seasonal working capital needs and its transformation strategy.

“In order to address the permanent shift in structural shopping behaviour as a result of the Covid-19 pandemic, the CVA is being launched out of absolute necessity.

“The proposal to creditors outlines a combination of a reduction of rent and a move to rebase Clarks’ rental cost base through a turnover-based model that aligns to future performance and reflects the wider retail market.

“As part of the CVA, we will move 60 of our 320 stores to nil rent.

“It is important to stress that we are not announcing the closure of any stores today, and employees and suppliers will continue to be paid.”

If successful in a vote next month, LionRock will buy a majority stake, with the Clark family to remain invested in the business.

Daniel Tseung, founder and managing director of LionRock Capital, added: “Clarks is one of the world’s most recognized consumer names and we look forward to working with the Clark family in extending its tradition of providing customers with top quality products and exceptional service.

“We are extremely pleased to have the opportunity to partner with Clarks in expanding the company’s global operations and worldwide customer footprint.

“Our investment will not only strengthen Clarks’ position as one of the world’s most recognized brands, but also allow growth into key emerging markets.

“We believe our investment would create a stable platform for the company from which to manage through the unprecedented crisis, holistically restructure and transform the business and further expedite the brand’s growth globally going forward.”