Sale on the cards as Clintons owners weigh options

Sky News has learnt that the Weiss family, which previously controlled the American Greetings retail business, has drafted in the professional services firm KPMG to oversee a review of strategic options.

The move raises the possibility of a new owner for Clintons – which used to be called Clinton Cards – along with its 334-strong store portfolio and 2,500 employees.

Sources said that a firm decision to run an auction of the company had yet to be taken but looked like the most likely outcome.

Prospective bidders have already been contacted by KPMG.

Clintons is the second-biggest chain in Britain behind Card Factory.

The prospect of Clintons changing hands puts in play yet another of the high street’s best-known names.

Figures compiled by PricewaterhouseCoopers this week showed that shop closures reached their fastest rate in nearly a decade during the first half of this year, with an average of 16 shutting every day.

Dozens of prominent names have fallen into administration, axed stores or announced emergency financial restructurings, putting a profound strain on retail landlords and key parts of the industry’s supply chain.

Under the leadership of Eddie Shepherd since 2017, Clintons’ financial performance has seen something of an improvement.

Accounts to be filed at Companies House next month are expected to show that the business made a significantly smaller loss than the £14m it recorded in the year to February 2018.

Roughly 70 loss-making Clintons stores have been closed over the last five years, and any sale is expect to lead to further shops being axed.

The use of a Company Voluntary Arrangement – a controversial insolvency mechanism to which retailers such as Sir Philip Green’s Arcadia and Debenhams have turned this year – is not thought to be a prominent option at this stage, but has not been entirely ruled out.

One source said that “good progress” had been made with lease renegotiations with landlords.

Clintons is wholly owned by the Weiss family following a transaction last year which saw a 60% stake in American Greetings sold to Clayton Dubilier & Rice, the buyout firm.

The family continues to own 40% of American Greetings, which is the second-largest cards chain in the US, behind Hallmark.

They took control of the British chain in 2012 when they bought its bank debt from lenders and immediately forced it into administration.

In an effort to manage costs more prudently, its head office has been relocated above its store in Loughton, Essex.

A person close to Clintons said the opening of a planning, design and manufacturing centre in Corby last year meant that the forthcoming Christmas trading period would provide the first opportunity “to capitalise on the significant margin and operational benefits that flow from this investment”.

Clintons has sought to expand its non-cards business in recent years in a bid to compete more effectively with rivals.

The growth of online card retailers, many of which offer a bespoke and rapid service, has hurt high street retailers of a product that is also widely sold in supermarkets.

Earlier this year, Paperchase, another prominent stationery and cards chain, secured an agreement with creditors to slash its rent bill after launching a CVA.

A spokesman for Clintons said: “Every well-managed company undertakes a periodic and orderly review of strategic options, and this is no different.

“All Clintons staff are aware of the process and our focus is on the Christmas season and beyond.”

KPMG declined to comment.

2019-09-13T14:20:19+00:00By |

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