It has been reported by Sky News that directors at Clintons, the Card retailer, have written to landlords, inviting them to a number of meetings, as soon as next week, to discuss the possibility of store closures and rent reductions. In the background, of course, is the threat of a Company Voluntary Arrangement (CVA) if the landlords don't agree concessions.
The news of a potential CVA comes not too long after Britain’s second largest independent greeting cards chain initiated a sale process, attracting many parties interest.
Clintons has 330 UK stores and 2,500 employees are also at risk.
There are many options to be discussed, be it from restructuring or refinancing. Eddie Shepherd, Chief Executive of Clintons is keen to keep as many stores open as possible.
KPMG has been instructed to work on the negotiations. This comes as not too much a surprise being that the accountancy firm is experienced in handling retail CVAs, from its work with Mothercare and Paperchase earlier this year, to name but a few.
Clintons becomes the next high street chain to resort to extreme measures in order to survive. Currently the retail market is facing tough trading conditions, rising fixed costs and a lack of consumer confidence. All of this, alongside the rise of online retailers, especially for online card stores such as Moonpig.com, FunkyPigeon.com and with the UK greeting card chain retail leader, Card Factory opening up an online base. As such, it is not surprising that Clinton’s are struggling.
Reviewing the history of the chain, this is not the first time it faces a restructuring proposal. Just seven years ago Clintons Cards fell into administration. Store closures have been frequent over the past 5 years, with 70 loss making stores closing.
Clintons is owned by the Weiss family, who previously owned the American Greetings retail business. In 2012 when they acquired the British chain, they bought its bank debt from lenders and immediately forced it into administration. To manage costs more effectively, its head office was relocated to above its store in Loughton, Essex.
Clinton’s is expected to decide on Monday, November 18, whether to go ahead with its planned CVA.