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Clintons, the high street greeting card chain, was sold out of administration on Wednesday to the Weiss family, its current owners, in a deal that will save 2,500 jobs and 334 stores.
The long-troubled retailer, formerly Clinton Cards, had faced increasing cash flow pressures. In September the company brought in KPMG to review options for restructuring. Wednesday’s transaction will allow the group to escape many of its debt obligations.
Clintons had previously tried to pursue a company voluntary agreement — a form of insolvency where businesses request better terms from their creditors — with its landlords.
According to a person involved with the process, after “town hall” meetings with landlords over the autumn, it became clear that several of them would oppose any CVA.
One landlord said there appeared to be little in the way of fresh investment or a new strategy under the mooted CVA plan, which was never formally launched.
Because Clintons’ owner is also one of its biggest suppliers, its votes would have been excluded from one of the two votes needed to approve a CVA, potentially giving landlords an opportunity to block the exercise.
The stores will now operate “under licence” from the administrators, giving Clintons a year to either agree new leases with landlords or close stores.
The Loughton-based retailer last went into administration in 2012, when American Greetings, a supplier, bought £36m of Clintons’ debt and forced it into administration. American Greetings subsequently purchased Clintons via a subsidiary, after 350 branches were closed.
Eddie Shepherd, the company’s chief executive, said in a statement: “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 . . . We are confident that this deal will kick-start a new chapter for our business.”
KPMG has not said how much the chain’s creditors will be repaid via the process, but will be obliged to reveal the information in subsequent disclosures.
Clintons is not alone in its greeting card travails. Listed competitor Card Factory will be demoted from the FTSE 250 index as of December 20, based on Wednesday night’s closing price.
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