According to word coming from Clinton Cards, the company may be headed towards administration which could potentially place the jobs of more than 8,000 people at risk. The company, which is the UK’s largest retailer of specialist cards, stated that they may be put into administration by their biggest supplier and all 139 Birthday and 628 Clinton stores have asked to suspend trading shares at the moment.
At the heart of the matter was the company’s belief that American Greetings, their largest supplier, would work with them if they had garnered control of their debt. Unfortunately, this was not the case and the American card company instead announced it would enforce the terms of the loan. In the meantime, the UK chain has been trying to find a buyer for at least the 139 Birthdays stores since last July, but this never came to fruition.
Since Clinton Cards, controlled by the Lewin family, is unable at this time to repay loans, it has agreed that there is no alternative but to be placed under administration. Actually, the loans were not taken through American Greetings but rather the Royal Bank of Scotland and Barclays. Those financial institutions then sold those debts to American Greetings for £35 million. Now it is the American Greetings company that owns the loans and they are calling for repayment.
There is some amount of conjecture as to why Clinton Cards’ largest supplier should buy out its debt, but the current thinking is that this will enable American Greetings to benefit from assets without being bogged down by liabilities. Even so, Clinton Cards is just one more high street chain to succumb to insolvency as did Peacocks, Game Group and Blacks Leisure before them.
