Li Ning, the gymnast-entrepreneur who lit the Olympic flame during China’s 2008 Games, has bought control of one of Britain’s oldest shoe producers, extending the global shopping spree by Chinese companies for famous international brands. Viva China Holdings, the sports talent agency founded by Li, has agreed to pay £51 million (US$69.7 million) for 51 percent of LionRock Capital Partners QiLe Limited, the private equity firm which will own the Clarks brand, according to a filing to the Hong Kong stock exchange. The investment would give Viva China control of Clarks when LionRock completes its £100 million investment to recapitalize Clarks. Li is the non-executive chairman of LionRock.
Based in the same village in south-western England’s Somerset county for nearly two centuries since its establishment in 1825, Clarks’ business has struggled along with the global retailing industry, as the raging coronavirus pandemic kept staff from workshops and sapped the appetite for consumption. The retailer, operating 320 stores in the UK alone, had to cut 900 jobs last May out of a global workforce of 13,000, after reporting a 2019 loss of £83 million. The company warned of deteriorating performance in 2020.
“The challenges to our business brought on by Covid-19 have meant that we need more resources and investment to fully deliver [Clarks’] strategy and safeguard the future of our business,” said the shoemaker’s chief executive Giorgio Presca in November. “The new partnership with LionRock will provide this as well as the expertise to grow the Clarks brand in China, which remains a primary opportunity.”
Li’s purchase of Clarks follows the acquisitions of dozens of global sports brands by Anta Sports, Xtep, and 361 Degrees International, which make up China’s four largest sportswear producers along with Li’s eponymous brand.
Anta’s brands cover Fila, and Japan’s Descente, as well as an investment in the Finnish company Amer, which owns multiple brands, from Atomic skis to Salomon snowboards, Arc’teryx outdoor gear to Mavic bicycle wheels and Suunto sports watches.
Xtep’s stable of brands now includes the hiking brand Merrell, leisure brand Hush Puppies, and running specialist Saucony, as well as the leisure brands K-Swiss, Palladium, and Supra.
“Clarks is one of the world‘s most recognized consumer names,” LionRock’s founder and managing director Daniel Tseung said in November. “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.
Li owns a 92.91 percent of Viva China, which was established in 2009, according to its interim report for 2020.
The price tag for Clarks would be set off against an equivalent amount of £54 million that Viva China lent to LionRock Capital last September, according to the statement on Friday.
Shares of Viva China fell by 1.5 percent to HK$0.65 in Hong Kong after the announcement.