Thursday 21 September 2017

Clinton cards on brink of administration in the UK

PA
PA

Embattled retailer Clinton Cards is set to lose its fight for survival after its largest supplier said it will force it into administration later today.

Last year it put its Irish operation into liquidation, with the closure of 14 shops here.

The retailer, which operates 628 Clintons and 139 Birthdays stores in the UK , has requested that its shares be suspended on the London Stock Exchange.



The move comes after its banks - Barclays and taxpayer-backed Royal Bank of Scotland - sold the company's £35m of loans to its biggest supplier, American Greetings.



But whereas the banks waived certain loan conditions, American Greetings has said it will push the company into administration today.



Clintons is the UK's biggest card retailer and employs more than 8,000 staff.



It is understood that administrators would continue to run the stores as normal while seeking a buyer for the business, but large number of stores could be closed.



Its fall into administration would be another blow to the UK High Street after recent high-profile casualties, including video games retailer Game Group, fashion chain Peacocks and outdoor specialist Blacks Leisure.



Clintons has suffered dire trading in recent months as it comes up against stiff competition from supermarkets and online retailers such as Funky Pigeon and Moonpig, which sell personalised cards.



It recorded a pre-tax loss of £3.7m in the 26 weeks to January 29, compared with a profit of £11.7m in the previous year, and warned that the second half of the year would be below expectations. Its shares have lost more than 80pc of their value since the start of 2010.



Today, it revealed more poor trading for the 14 weeks since January 29, with same-store sales down 3.5pc.



Chief executive Darcy Willson-Rymer has been carrying out a strategic review over the past six months, which is understood to have included a fruitless search for a buyer for all of the business or its Birthdays chain.



The group said it was not in breach of any financial covenant or repayment obligation but the banks had waived "technical breaches of default" related to management changes and supplier-related discussions.



It had believed that American Greetings would extend the support to the company if it bought the loans, but it was told that it would enforce the conditions of the loan.



The chain was founded in 1968 when Don Lewin opened the first store in Epping in Essex.



In 1988 it had 77 stores when it floated on the stock market. Its store numbers were swelled by numerous acquisitions including Hallmark Cards and the Birthdays Group, which had 170 stores, in 2004.



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