The specialist greetings card retailer Clinton Cards has suspended shares on the stock exchange and it’s major supplier, American Greetings, has acquired its £35 million loan facilities from Barclays and the Royal Bank of Scotland.
After agreeing to take on the debt, American Greetings announced to the Clinton Cards board that it intends to enforce the loan. As Clinton’s is not in a position to repay the loan it has been placed in administration.
It is likely that Clintons had expected American Greetings to “extend the waiver of the technical breaches of the loan agreement”. This turned out not to be the case and the company has appointed Zolfo Cooper as administrator.
Peter Saville, joint administrator at Zolfo Cooper, said the priority now is to “stabilise the business and assess its financial position”, also warning that: “a number of stores will need to be closed in order to make the business financially viable”.
Clinton Cards will continue to trade while the administrator embarks upon “a full marketing exercise to find buyers for all or parts of the Group so that the best possible outcome can be achieved for stakeholders”.
In a statement to the Stock Exchange this morning, Clinton’s announced: “Having completed the strategic review, the board recognised the need to restructure the business and had been expecting to review its business plans and strategy with its stakeholders and exploring ways to produce a better outcome for the Company’s stakeholders as a whole.”
Shares in Clinton Cards, which have lost more than 80 percent of their value since the start of 2010, closed at 6.75 pence on Tuesday, valuing the group at about 14 million pounds. In March, Clinton reported a loss of £3.7m for the six months to the end of January 2012.
Chief executive Darcy Willson-Rymer, appointed last October, has been conducting a strategic review of the business and was in discussion with stakeholders until the end of April. The company, which trades from 628 Clinton Cards stores and 139 Birthdays outlets, had been due to publish the results of this review but delayed making the results public, resulting in speculation that it was about to enter administration.
Thousands of jobs are now at risk and Clinton’s suppliers will be anxiously counting the cost.
2 thoughts on “Clinton Cards enters administration after American Greetings enforces debt”
I must admit a feeling of schadenfreude on reding this news. When I was the owner of several Hallmark Cards outlets back in the 1980’s, Clinton was a thorn in the side of every UK greetings card retailer. He squeezed out almost all independently owned Hallmark Card retail shops in the UK. He was heavy-handed and quite ruthless in opening up retail shops practically next door to existing retailers. Although I have every sympathy with the staff who may lose their jobs, I believe that this is case of what goes around comes around.
So sad! but who will be the winner in all this (The banks)
4,800 on Job seekers me thinks.