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Clintons Cards pushed into administration by largest supplier Clinton Cards pushed into administration by largest supplier
(about 3 hours later)
There are occasions when more than just a card expressing sympathy is needed, and for the more than 8,000 shop assistants at Clinton Cards waiting to hear whether they will lose their jobs, this is certainly one of those times. There are occasions when more than just a sympathy card is needed, and for the more than 8,000 shop assistants at Clinton Cards waiting to hear whether they will lose their jobs, this is certainly one of those times.
In the kind of aggressive financial power play rarely seen in the UK, the retailer's largest supplier, the US card giant American Greetings, forced the company into administration after taking over its bank loans and unexpectedly calling them in.In the kind of aggressive financial power play rarely seen in the UK, the retailer's largest supplier, the US card giant American Greetings, forced the company into administration after taking over its bank loans and unexpectedly calling them in.
Question marks had been hanging over the future of Clinton Cards for some time. Like the struggling HMV chain, and Game – which was recently dunked into administration – Clinton had become an anachronism as Britons increasingly threw birthday cards in their supermarket shopping trolleys, sent greetings on Facebook or logged on to websites like Moonpig to design personalised cards. Question marks had been hanging over the future of Clinton Cards for some time. Like the struggling HMV chain, and Game – which was recently put into administration – Clinton had become an anachronism as Britons increasingly threw birthday cards in their supermarket shopping trolleys, sent greetings on Facebook or used websites such as Moonpig to design personalised cards.
Retail analysts complained that the Clinton ranges were dated and "too saccharine". In a recent column retail guru Mary Portas described the gift selection as "awful": "Does anyone's granny really want to hang a sign in her kitchen that says, 'What happens at Nana's stays at Nana's'?" Retail analysts said the Clinton ranges were dated and "too saccharine". In a recent column retail guru Mary Portas called the gift selection "awful", adding: "Does anyone's granny really want to hang a sign in her kitchen that says, 'What happens at Nana's stays at Nana's'?"
She added: "Most of the people I've spoken to about Clinton feel it is expensive compared with the supermarkets."She added: "Most of the people I've spoken to about Clinton feel it is expensive compared with the supermarkets."
Clinton's problems are the latest blow to the high street after recent high-profile casualties, including the fashion chain Peacocks and outdoor specialist Blacks Leisure. One in seven high street stores is now empty, and the collapse of Clintons will be a major blow for small shopping centres and local parades. Clinton's problems are the latest blow to the high street after recent high-profile casualties, including the fashion chain Peacocks and outdoor specialist Blacks Leisure. One in seven high street stores is now empty, and the collapse of Clinton will be a major blow for small shopping centres and local parades.
But the financial crisis had made life even more difficult for Clintons. It was being pulled down by an onerous rent bill for its bloated store estate, which after taking over a string of rivals had expanded to more than 750 outlets. But the financial crisis had made life even more difficult for Clinton. It was being pulled down by an onerous rent bill for its bloated store estate, which after taking over a string of rivals had expanded to more than 750 outlets.
Peter Saville, one of its administrators at Zolfo Cooper, said it had been battling "extremely challenging trading conditions" and had racked up losses of more than £130m since 2004. Peter Saville, one of its administrators at Zolfo Cooper, said it had been battling "extremely challenging trading conditions" and made losses of more than £130m since 2004.
Clintons was once held up as a successful family business; it was started by a Londoner, Don Lewin, the son of an East End chimney sweep who left school at 15. He opened his first card shop in Epping in 1968, naming it after his son Clinton, and later successfully floated the business on the stock exchange. Clinton was once held up as a successful family business; it was started by a Londoner, Don Lewin, the son of an East End chimney sweep who left school at 15. He opened his first card shop in Epping in 1968, naming it after his son Clinton, and later successfully floated the business on the stock exchange.
Its demise was acknowledged by fellow East End entrepreneur Lord Sugar, who tweeted: "Very sad news. Once a great company built by founder from nowhere." Its demise was noted by fellow East End entrepreneur Lord Sugar, who tweeted: "Very sad news. Once a great company built by founder from nowhere."
The Lewins are still involved with the retailer, with the family now mooted as potential buyers of the stricken chain.The Lewins are still involved with the retailer, with the family now mooted as potential buyers of the stricken chain.
Although the name American Greetings is unknown to UK consumers, the 100-year-old Ohio manufacturer is the second largest greeting cards firm after Hallmark with annual sales of nearly £1bn. In a statement the company said Clintons already owed it $25m and had missed a number of payments. Although the name American Greetings is unknown to UK consumers, the 100-year-old Ohio manufacturer is the second largest greeting cards firm after Hallmark with annual sales of nearly £1bn. In a statement the company said Clinton already owed it $25m (£15.5m) and had missed a number of payments. It had recently stopped supplying the chain, and its chief executive, Zev Weiss, also hinted it might set up its own UK card chain: "We may ultimately participate in the ownership of the business or may continue as a supplier to any buyer of the business."
It had recently stopped supplying the chain, and its chief executive, Zev Weiss, also hinted it might set up its own card chain in the UK: "We may ultimately participate in the ownership of the business or may continue as a supplier to any buyer of the business." No redundancies were announced by Zolfo Cooper but Saville said shop closures were on the cards as it looked for a buyer: "Our first priority is to stabilise the business … it is likely that a number of stores will need to be closed in order to make the business financially viable."
No redundancies were announced by Zolfo Cooper but Saville said shop closures were on the cards as it looked for a buyer: "Our first priority is to stabilise the business ... it is likely that a number of stores will need to be closed in order to make the business financially viable." The retailer, which has annual sales of about £360m, has 8,350 employees, mostly working in store and many on a part-time basis.
The retailer, which has annual sales of around £360m, has 8,350 employees, mostly working in store and many on a part-time basis. Retail experts said a shakeup at Clinton was long overdue.
Retail experts said a shakeup at Clintons was long overdue.
But for two companies that have built businesses out of helping people tell each other how they feel, there was no exchange of cards or teddy bears holding hearts ahead of the big day.But for two companies that have built businesses out of helping people tell each other how they feel, there was no exchange of cards or teddy bears holding hearts ahead of the big day.
The move by American Greetings came out of the blue, wrongfooting Clintons' management. They had been confident American Greetings would continue to be support them when it took over Clinton's debts of £35m, which were owed to Barclays and the state-backed Royal Bank of Scotland. The move by American Greetings came out of the blue, wrongfooting Clinton's management. They had been confident American Greetings would continue to be support them when it took over Clinton's debts of £35m, which were owed to Barclays and the state-backed Royal Bank of Scotland.
Nick Hood, from the analyst group Company Watch, said American Greetings had used a popular US arrangement dubbed "loan to own": "This is a very American way of doing insolvency – you buy the loans as a way of taking control of the company."Nick Hood, from the analyst group Company Watch, said American Greetings had used a popular US arrangement dubbed "loan to own": "This is a very American way of doing insolvency – you buy the loans as a way of taking control of the company."
The American firm is now in pole position in any restructuring. Unlike banks, suppliers are unsecured creditors and usually lose out when a company goes under.The American firm is now in pole position in any restructuring. Unlike banks, suppliers are unsecured creditors and usually lose out when a company goes under.
"They may not get all their money back this way, but they will get a lot more back than if they had not employed this strategy," said Hood."They may not get all their money back this way, but they will get a lot more back than if they had not employed this strategy," said Hood.
Retail casualties of 2012Retail casualties of 2012
6 January: Outdoors specialist Blacks Leisure, owner of 306 Blacks and Millets shops, collapses. Rival JD Sports buys the business from the administrators. So far it has closed more than 80 shops. 6 January: outdoors specialist Blacks Leisure, owner of 306 Blacks and Millets shops, collapses. Rival JD Sports buys the business from the administrators. So far it has closed more than 80 shops.
9 January: Lingerie chain La Senza, with 146 shops and 2,600 staff, goes bust. Sixty stores and 1,000 jobs saved when Kuwaiti retailer Alshaya buys part of the business. 9 January: lingerie chain La Senza, with 146 shops and 2,600 staff, goes bust. Sixty stores and 1,000 jobs saved when Kuwaiti retailer Alshaya buys part of the business.
16 January: Retro gift shop Past Times, with about 100 shops and 1,000 staff, becomes history. 16 January: retro gift shop Past Times, with about 100 shops and 1,000 staff, becomes history.
16 January: Budget fashion chain Peacocks calls in the administrators and has debts of £600m. It has 550 shops and nearly 10,000 employees. In February Edinburgh Woollen Mill bought two-thirds of the shops, but 3,100 staff have lost their jobs. 16 January: budget fashion chain Peacocks calls in the administrators and has debts of £600m. It has 550 shops and nearly 10,000 employees. In February Edinburgh Woollen Mill bought two-thirds of the shops, but 3,100 staff have lost their jobs.
19 January: Pumpkin Patch, the upmarket children's clothing chain, pulls down the shutters, with 36 stores and 400 jobs.19 January: Pumpkin Patch, the upmarket children's clothing chain, pulls down the shutters, with 36 stores and 400 jobs.
16 March: Young fashion business Firetrap collapses into administration. Stores close but brand snapped up by Sports Direct. 16 March: young fashion business Firetrap collapses into administration. Stores close but brand snapped up by Sports Direct.
6 March: Fashion chain Fenn Wright Manson folds, with 17 shops, 62 department store concessions and 350 staff. 6 March: fashion chain Fenn Wright Manson folds, with 17 shops, 62 department store concessions and 350 staff.
26 March: Video game specialist Game collapses with 1,300 stores in Britain, Spain, France and Australia. Around 10,000 staff, with 5,500 in UK; 2,000 made redundant when 277 stores closed. Debts of £60m. 26 March: video game specialist Game collapses with 1,300 stores in Britain, Spain, France and Australia. Around 10,000 staff, with 5,500 in UK; 2,000 made redundant when 277 stores closed. Debts of £60m.
2 April: Budget women's fashion business Ellie Louise, which also operates under names such as Seconds Ahead and Trade Secret, folds, with 97 stores and 400 staff. 2 April: budget women's fashion business Ellie Louise, which also operates under names such as Seconds Ahead and Trade Secret, folds, with 97 stores and 400 staff.