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Clintons, the card retailer, has been bought out of administration in a deal that safeguards 2,500 jobs.
The pre-agreed deal with the chain’s existing US owners comes after Clintons failed to win support from landlords for an insolvency procedure known as a company voluntary arrangement (CVA) under which it wanted to cut rents and close up to 66 stores.
Clintons, which was founded as Clinton Cards in 1968 by Don Lewin, has been owned by the Weiss family since 2012 when it previously fell into administration. The Weiss family owns one of Clintons’ biggest suppliers, card maker American Greetings.
The loss-making company has been suffering from heavy competition from discounter Card Factory and began sounding out landlords last month about a restructure.
Like many other retailers who have been forced to restructure or go into administration in the past 18 months, including House of Fraser, New Look, Carpetright and Mothercare, Clintons has also come under pressure from rising costs, the switch to online shopping and lacklustre consumer spending.
The pre-pack administration deal will secure jobs for the group’s entire workforce and mean all its stores continue to trade, but wipes out tens of millions of pounds of debts owed to suppliers. The administration will also reset leases enabling the company to renegotiate rents or pull out of stores in the new year.
Eddie Shepherd, chief executive of Clintons, said that without landlords’ support for a CVA it had “no other investment options available” and so had had to place the company into administration.
“We are pleased to have been able to secure the future of the Clintons business, protecting all of our talented 2,500-strong workforce and ensuring continuation of trade across all of our UK store network at what is a crucial time of the year for the business.
“Like so many of our fellow high street retailers, we have worked tirelessly to contend with the maelstrom of issues impacting the sector, from business rates pressures, to fragile consumer confidence and the lack of clarity around the taxation of online retail businesses.”
He added: “We are confident that this deal will kickstart a new chapter for our business.”
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