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Clinton Cards sold to US firm American Greetings | Clinton Cards sold to US firm American Greetings |
(about 2 hours later) | |
The remaining 397 Clinton Cards stores have been sold to a US greeting card company, saving 4,500 jobs. | The remaining 397 Clinton Cards stores have been sold to a US greeting card company, saving 4,500 jobs. |
Lakeshore Lending Limited, a subsidiary of card maker American Greetings, has bought its brands and assets, administrators Zolfo Cooper said. | Lakeshore Lending Limited, a subsidiary of card maker American Greetings, has bought its brands and assets, administrators Zolfo Cooper said. |
Clinton Cards was placed into administration on 9 May. | Clinton Cards was placed into administration on 9 May. |
A week later, Zolfo Cooper announced that 350 out of a total of 784 stores would close, including all of its Birthdays-branded stores. | A week later, Zolfo Cooper announced that 350 out of a total of 784 stores would close, including all of its Birthdays-branded stores. |
The closures were expected to lead to the loss of 3,000 full or part-time jobs, said the administrators. | The closures were expected to lead to the loss of 3,000 full or part-time jobs, said the administrators. |
Strong position | |
Commenting on the deal, Patrick O'Brien, retail analyst with Verdict Research, told the BBC it was "not a surprise" that American Greetings was the buyer. | |
Through its UK subsidiary, Ohio-based American Greetings had already acquired $56m (£36m) of Clinton's senior secured debt, making it a preferential creditor and giving it a strong position in the subsequent sale talks. | |
Mr O'Brien said in his opinion American Greetings had "become frustrated" with Clinton's management. | |
"It was an aggressive bit of business," said Mr O'Brien, "but American Greetings had lost confidence in the management and wanted to protect their UK sales outlets. | |
"Clinton's was only ever going one way." | |
Liquidation process | |
American Greetings used $37m of this secured debt to bid for Clinton's remaining assets that Zolfo Cooper is trying to sell, in what is called a "credit bid". | |
American Greetings is hoping that the remaining $19m it is owed by Clinton's will be repaid once Zolfo has completed the liquidation process. | American Greetings is hoping that the remaining $19m it is owed by Clinton's will be repaid once Zolfo has completed the liquidation process. |
This could take six to 12 months. | This could take six to 12 months. |
"The unsecured creditors are unlikely to get anything from the liquidation," said Mr O'Brien. | |
The US firm is over 100 years old and has been Clinton's major supplier for 40 years. | The US firm is over 100 years old and has been Clinton's major supplier for 40 years. |
The company said the acquisition would generate revenues of about $315m a year, or $265m excluding revenues from the sale of American Greetings products. | The company said the acquisition would generate revenues of about $315m a year, or $265m excluding revenues from the sale of American Greetings products. |
Zev Weiss, American Greetings chief executive, said: "We are pleased to welcome these stores, the Clinton Cards brand, and the approximately 4,500 employees as members of the American Greetings family." | Zev Weiss, American Greetings chief executive, said: "We are pleased to welcome these stores, the Clinton Cards brand, and the approximately 4,500 employees as members of the American Greetings family." |
The US company generates annual revenues of around $1.7bn. | The US company generates annual revenues of around $1.7bn. |
Do you work at Clinton cards? How do you feel about the deal with Lakeshore Lending Limited? You can get in touch using the form below: | Do you work at Clinton cards? How do you feel about the deal with Lakeshore Lending Limited? You can get in touch using the form below: |